AI Revolution Was a Lie: Startup Founder Exposed for Using Philippine Call Centre Workers to Fake E-Commerce Tech

The AI Revolution? A Human-Powered Deception Behind A Tech App Fraud

In recent years, the promise of artificial intelligence (AI) has swept across industries, offering automation and efficiency in ways never before imagined.

However, behind some of these claims lurk deceivers, manipulating the trust placed in AI to line their own pockets.

One such instance has surfaced in the case of Albert Saniger, the former CEO of Nate, a once-promising e-commerce app that claimed to be powered by AI.

Like something out of a tech industry exposé, the "AI" behind the app was revealed to be a network of people working in the Philippines.

False Promises of AI Automation for E-Commerce

Nate, launched in 2020, was marketed as a universal shopping tool designed to simplify online purchasing.

Albert Saniger falsely represented his app as AI-driven; in fact, it was run manually by a team in the Philippines, deceiving both investors and the public. (Source: PCN)

Users were promised a one-tap checkout that would automatically fill in shipping details, select sizes, and complete payments – all without human intervention.

According to Saniger, this was the result of sophisticated AI technology that would revolutionise the shopping experience.

Nate app claimed to simplify online shopping by offering a one-tap checkout and personalised product curation, powered by AI. (Source: COOL HUNTING)

However, it soon became clear that this was not the case.

The "AI" was a façade, masking the involvement of hundreds of human workers hired to manually carry out the tasks that the app claimed to automate.

The workers, located in a call centre in the Philippines, were tasked with completing purchases as users interacted with the app, undermining the very core of its supposed technology.

$40 Million Raised Under False Pretences

Saniger managed to convince investors to pour over $40 million into Nate, drawing in venture capital firms with promises of innovative AI-driven technology.

But the app’s true operations were far from what was advertised.

Acting US Attorney for New York, Matthew Podolsky, expressed that Saniger had exploited "the promise and allure of AI technology to build a false narrative about innovation that never existed."

Podolsky stated,

"This type of deception not only victimises innocent investors. It diverts capital from legitimate startups, makes investors sceptical of real breakthroughs, and ultimately impedes the progress of AI development."

Nate’s Failed AI And Its Hidden Workers

Despite acquiring AI technology from a third-party provider and assembling a team of data scientists, Nate’s app was unable to meet its ambitious goals.

Court documents reveal that while the app had some AI components, it could not consistently complete transactions.

In fact, the level of automation was effectively zero.

During the busy holiday season of 2021, Saniger allegedly ordered his engineering team to develop bots to automate a few transactions.

Yet, even with the bots, human workers still played a key role in handling most of the purchases.

Source: Freepik

As questions began to rise about the app’s capabilities, Saniger shut down Nate in January 2023 and fired the remaining employees, according to the Securities and Exchange Commission (SEC).

A Case of Securities and Wire Fraud

The deception has not gone unnoticed.

Saniger has been charged with one count of securities fraud and one count of wire fraud.

Each charge carries a maximum penalty of 20 years in prison.

The SEC has also filed a civil action against Saniger, seeking to bar him from holding future positions in similar companies and demanding the return of investor funds.

The charges come after months of scrutiny and investigation, with authorities claiming that the true source of Nate’s so-called "automation" was the human labour force working behind the scenes.

A Familiar Pattern of Deception

The case bears striking similarities to other high-profile tech scandals, such as the Theranos case, where promises of revolutionary technology were revealed to be nothing more than smoke and mirrors.

Just like Elizabeth Holmes, the founder of Theranos, Saniger exploited the hype surrounding emerging technologies to deceive investors and the public.

So, how many other tech startups are out there, claiming to harness the power of AI while relying on traditional, human-driven methods to deliver results?

And more importantly, how many more people are willing to take advantage of the AI boom for personal gain?