‘AI-powered’ shopping app alleged to have been human-powered

In the tech world, it’s not uncommon to see companies hyping up their products with claims of AI integration, even if it’s just a small element hidden in the background. This allows them to create flashy marketing campaigns that give the impression of cutting-edge technology at work.

However, one tech founder, Albert Saniger, is facing legal trouble after being accused of misleading investors about his company’s technology. It was revealed that his “AI-infused” universal shopping app was actually being operated by a team of people in a call center in the Philippines.

Saniger, the former CEO of Nate, has been indicted for deceiving investors who put money into the shopping app. The app, which raised over $50 million from various investors, was marketed as a universal shopping cart app powered by AI, promising to streamline the online shopping experience by automating the checkout process.

Despite claims of AI capabilities, it was discovered that Nate’s AI technology was unable to consistently complete e-commerce purchases. Instead, the company relied on human workers to manually process transactions, giving the illusion of automation.

Saniger allegedly used hundreds of contractors in a call center in the Philippines to handle purchases made through the app. In busy periods, the company’s engineering team also developed bots to automate some transactions.

The U.S. Attorney’s Office has condemned Saniger’s actions, stating that such deception not only harms investors but also hinders the progress of AI development. In 2023, the U.S. Federal Trade Commission issued warnings to companies about exaggerating claims related to AI technology.