The crime isn't in publishing AI music. The crime was that he setup fake listeners streaming his songs so he could get royalties and inflate popularity. Initially he published his own songs, but to scale up and avoid detection he started creating music at scale - That's where AI Comes in.
Smith's scheme, which prosecutors say ran for seven years, involved creating thousands of fake streaming accounts using purchased email addresses. He developed software to play his AI-generated music on repeat from various computers, mimicking individual listeners from different locations. In an industry where success is measured by digital listens, Smith's fabricated catalog reportedly managed to rack up billions of streams.