According to a press release from the U.S. Department of Justice, former CEO of AI Shopping Apps, former CEO of AI Shopping Apps, who promised a “universal” checkout experience, was charged with fraudulent investors on Wednesday.
Founded in 2018, Nate raised more than $50 million in 2021 from investors such as Coatue and Forerunner Ventures, led by Renegade Partners.
Nate said that thanks to AI, app users can purchase from e-commerce sites with just one click. But the reality is that Nate relies heavily on hundreds of human contractors in call centers in the Philippines and the Southern District of New York claims to manually complete their purchases.
Saniger has raised millions of people in venture funding by claiming that Nate could trade online “without human intervention” except in edge cases where AI failed to complete the transaction. However, despite Nate gaining some AI technology and hiring data scientists, the app’s actual automation rate was virtually 0%, the DOJ claims.
Nate’s massive use of human contractors was the subject of an informational investigation in 2022.
Saniger did not respond to requests for comment. He is currently listed as a managing partner for the New York VC Buttercore Partner, but did not respond to requests for comment.
The DOJ indictment says Nate ran out of money and was forced to sell his assets in January 2023, leaving investors with a “almost total” loss. Albert Saniger’s LinkedIn profile shows that as of 2023 he was no longer the CEO.
Nate isn’t the only startup that has been allegedly exaggerating AI capabilities. For example, launching the “AI” drive-through software also has been enhanced launching the “AI” drive-through software reported by Verge in 2023.
More recently, Business Insider reported that Evenup, an AI Legal Tech Unicorn, uses humans to do much of its job.
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