AI-Powered App Found To Be Operated By Call Centre Workers In Philippines, Founder Charged

Albert Saniger has been charged with fraud after it was found that his artificial intelligence (AI) shopping app, Nate, relied on Philippines call centre employees to complete the purchases manually. The Federal Bureau of Investigation (FBI) said Saniger promoted a "scheme filled with smoke and mirrors".

"As alleged, Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed," said Matthew Podolsky, the acting United States attorney for the Southern District of New York.

“This type of deception not only victimises innocent investors, it diverts capital from legitimate startups, makes investors skeptical of real breakthroughs, and ultimately impedes the progress of AI development."

Saniger founded the app in 2018, raising over $50 million in funding from investors such as Coatue and Forerunner Ventures. More recently, he raised $38 million in Series A funding in 2021, led by Renegade Partners.

He promoted his product to investors and the public as a "magic shopping app" that simplified online shopping as customers could buy items from any e-commerce site with a single tap using the Nate app. Saniger claimed that the app took care of the rest of the checkout process, including billing and shipping information, using AI.

However, as per the Department of Justice, the app's automation rate "was effectively zero per cent". Hundreds of contractors, or “purchasing assistants”, in a Philippines call centre did the legwork and manually completed the purchases occurring over the Nate app.

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Previous instances

Saniger is not the only entrepreneur with a startup that has allegedly exaggerated its AI capabilities. According to a report in Business Insider, AI legal tech unicorn EvenUp used humans to do much of its legal work, despite claiming otherwise.

"The former employees said they witnessed numerous problems with EvenUp's AI, including missed injuries, hallucinated medical conditions, and incorrectly recorded doctor visits," the report highlighted.

Similarly, in 2023, AI-powered drive-thru company Presto Automation was found being powered by humans in the Philippines, after claiming to be "one of the largest labour automation technology providers in the industry".