Fintech founder charged in the Philippines with fraud after ‘AI shopping app’ found to be powered by people
Albert Saniger, founder and former CEO, of Nate, a shopping app with artificial intelligence that promised an “universal checkout experience”was charged on Wednesday with defrauding investors. According to a press release by the U.S. Department of Justice.
Nate was founded in 2018 and raised more than $50 million from investors such as Coatue, Forerunner Ventures and most recently, Forerunner Ventures. Renegade Partners led the $38 million Series A investment in 2021. Nate claimed that its app users could purchase from any ecommerce site in a single click thanks to AI. The DOJ’s Southern District in New York claims that Nate relied heavily upon hundreds of human contractors at a call center located in the Philippines for manual completion of these purchases.
Saniger raised venture capital by claiming Nate could transact online “without any human intervention” except in edge cases when the AI failed to complete the transaction. The DOJ claims that despite Nate’s acquisition of AI technology and hiring of data scientists, the app’s automation rate was 0%.
Nate’s heavy use of human contractors was the topic of An investigation will be conducted by The Information in the year 2022.
Saniger did not respond to a comment request. He is currently is listed as a managing director at New York VC Buttercore Partners. This firm did not respond to a comment request either.
Doj’s””https://www.justice.gov/usao-sdny/media/1396131/dl?inline” ” rel=””noreferrer noopener nofollow”” target=””_blank” “> Indictment states that Nate ran short of money in January 2023 and was forced by the court to sell all assets, leaving investors with “near-total” losses. LinkedIn shows that Albert Saniger was no longer the CEO in 2023.
Nate’s not the only startup to have allegedly exaggerated their AI capabilities. The Verge reports that a “AI” drive through software startup in the Philippines was also largely powered by humans. Business Insider reported as 2023. Business Insider reported
more recently. Report stated that EvenUp, an AI legal tech unicorn used humans for much of its work. Charles Rollet, a senior reporter for TechCrunch, is
Charles Rollet. His investigative reporting led to U.S. sanctions against four tech firms, including China’s biggest AI firm. Charles covered the surveillance sector for IPVM before joining TechCrunch. Charles lives in San Francisco and enjoys hiking with dogs. You can reach Charles on Signal using charlesrollet.12, or by calling +1-628-282-2811.
View Bio
