Fintech Founder Charged With Fraud After 'AI' Shopping App Found To Be Powered By Humans in the Philippines

Albert Saniger, the founder and former CEO of Nate, an AI shopping app that promised a 'universal' checkout experience, was charged with defrauding investors on Wednesday, according to a press release from the U.S. Department of Justice. From a report: Founded in 2018, Nate raised over $50 million from investors like Coatue and Forerunner Ventures, most recently raising a $38 million Series A in 2021 led by Renegade Partners. Nate said its app's users could buy from any e-commerce site with a single click, thanks to AI. In reality, however, Nate relied heavily on hundreds of human contractors in a call center in the Philippines to manually complete those purchases, the DOJ's Southern District of New York alleges.

Saniger raised millions in venture funding by claiming that Nate was able to transact online 'without human intervention,' except for edge cases where the AI failed to complete a transaction. But despite Nate acquiring some AI technology and hiring data scientists, its app's actual automation rate was effectively 0%, the DOJ claims.

Read more of this story at Slashdot.