Source: nate.tech
Federal prosecutors in New York have indicted the former CEO of AI shopping app Nate for allegedly defrauding investors by claiming that the company’s e-commerce checkout app was powered by advanced AI.
Human-powered: According to the official press release from the Department of Justice, Saniger repeatedly touted Nate’s "proprietary AI technology" to raise over $40 million, but instead relied on human workers to perform what the app was supposed to do algorithmically. CEO Albert Saniger reportedly told investors that Nate could handle 10,000 daily retail transactions with a single tap—implying the process was automated. In reality, workers in overseas call centers manually processed orders and mimicked the appearance of AI-driven automation. Prosecutors say these misrepresentations not only harmed investors but also cast doubt on truly innovative AI companies.
Disrupted by nature: In a recent report from The National News, sources detail how Filipino workers were tasked with completing transactions disguised as autonomous AI steps. When a tropical storm disrupted the Philippines call center in 2021, Nate allegedly opened a new operation in Romania to continue providing manual support. Investigators claim investors who tested the software were shown a seemingly seamless AI checkout that was actually performed by humans.
Total loss: Nate’s pitch materials—featuring promises of universal shopping capabilities and rapid checkouts—drew significant venture capital attention. In 2021, the company raised $38 million in a Series A round, but prosecutors say it ran out of funds by early 2023. That collapse reportedly left investors with what prosecutors describe as "near total" losses. Acting U.S. Attorney Matthew Podolsky described Saniger as exploiting "the promise and allure of AI technology to build a false narrative about innovation."