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4w ago

Ex-CEO Charged for Fraudulent Claims About AI-Powered Shopping App

Albert Saniger faces charges after it was revealed his app, Nate, relied on human labor rather than AI, deceiving investors and costing them millions.

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The Justice Department has indicted the former CEO of a shopping app for claiming to use AI when orders were handled by humans in the Philippines and Romania
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Overview

  • Albert Saniger, founder and former CEO of Nate, has been charged with securities and wire fraud by the U.S. Department of Justice.
  • Nate falsely marketed itself as an AI-powered shopping app capable of autonomous one-tap e-commerce transactions, but it relied on human contractors in the Philippines to complete purchases manually.
  • The app raised over $50 million from prominent investors, including Coatue and Forerunner Ventures, based on claims of groundbreaking AI automation.
  • The Department of Justice revealed that Nate’s automation rate was effectively zero, with no genuine AI functionality supporting its operations.
  • Acting U.S. Attorney Matthew Podolsky emphasized that such deception undermines trust in legitimate startups and hinders progress in AI innovation.