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4w ago

Nate Founder Albert Saniger Charged with Fraud Over Misleading AI Claims

The U.S. Department of Justice alleges Saniger misled investors about the capabilities of the shopping app, which relied on human labor instead of AI automation.

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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 by the U.S. Department of Justice with defrauding investors by exaggerating the app's AI capabilities.
  • Nate, promoted as an AI-driven shopping tool, used human contractors in the Philippines to manually process transactions, despite claims of full automation.
  • The startup raised over $50 million in venture funding, including a $38 million Series A in 2021, based on misrepresentations about its technology.
  • Nate ran out of funds and sold its assets in January 2023, with its actual automation rate alleged to be effectively 0% by the DOJ.
  • Despite the charges, Saniger remains active in venture capital as a managing partner at New York-based Buttercore Partners.