This Company’s ‘AI’ Was Really Just Remote Human Workers Pushing Buttons

A tech CEO who claimed to have built a cutting-edge AI for e-commerce was actually having human workers doing the tasks behind the scenes, according to a federal indictment.

Federal prosecutors in New York charged 35-year-old Albert Saniger with securities fraud for allegedly lying to investors about what his AI could do.

In 2018, Saniger founded Nate, an e-commerce company that claimed it was developing an AI program that could complete online purchases for the user with a single tap. The AI was designed to handle things like adding the shipping address and billing information. 

“Saniger repeatedly told investors and the public that the company’s app used proprietary AI technology to autonomously complete online purchases on behalf of users,” the Justice Department says. This included the claim that the AI could complete orders without human intervention at a 93% to 97% completion rate, according to the indictment. 

In addition, Saniger distinguished his technology from automated bots, saying Nate relied on neural networks to complete actions like a human would. He raised over $40 million from investors and hired a team of data scientists to help develop the AI. However, federal prosecutors allege that Saniger knew his technology was a sham.  

“As Saniger knew, at the time Nate was claiming to use AI to automate online purchases, the app’s actual automation rate was effectively zero percent,” the Justice Department says. “Saniger concealed that reality from investors and most Nate employees: he told employees to keep Nate’s automation rate secret.”

Instead, Saniger allegedly hired hundreds of human remote workers, many based in the Philippines, to manually process transactions for his company’s AI program. By fall 2021, Saniger directed his company to develop automated bots, “despite his numerous prior representations that Nate did not use bots (or ‘dumb bots,’ as he referred to them),” the DOJ says.

The alleged fraud came to light after The Information reported about the exaggerated claims involving Nate’s AI program in June 2022. “Ultimately, Albert Saniger, the defendant, never successfully developed or deployed functional AI on Nate to automate customer purchases,” the indictment adds. “In or about January 2023, Nate ran out of money, and the company was forced to sell its assets. Nate’s investors were left with near total losses.”

Saniger didn’t immediately respond to a request for comment. According to his LinkedIn profile, he was CEO of Nate until 2023 before becoming a partner at venture capital firm Buttercore. If found guilty of securities fraud and wire fraud, he faces a maximum penalty of 40 years in prison.

About Michael Kan

Senior Reporter

I’ve been working as a journalist for over 15 years—I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017.

Read Michael’s full bio

Read the latest from Michael Kan