Fintech Founder Faces Fraud Charges Over Fake AI Shopping App
The founder of Nate raises over $50 million by claiming his shopping app uses AI, but federal prosecutors say the technology relies entirely on human workers in the Philippines.
Albert Saniger, the founder and former CEO of fintech startup Nate, faces federal fraud charges after the U.S. Department of Justice reveals his supposedly AI-powered shopping app relies entirely on human workers. Nate raises over $50 million from prominent investors by promising a "universal" checkout experience that operates without human intervention, but authorities say the actual automation rate sits at zero percent.
Instead of using artificial intelligence to process online purchases, the startup secretly employs hundreds of human contractors at a call center in the Philippines to manually complete customer orders. Saniger allegedly tells backers that humans only handle rare edge cases, while in reality the overseas workforce processes every single transaction.
This deceptive practice ultimately leads to the company running out of money and selling off its assets in early 2023, leaving investors with near total losses. Nate is not the only company caught misrepresenting its technology, as recent investigations expose other "AI" startups in the fast-food and legal tech sectors that similarly rely on hidden human labor to power their platforms.