An American app that claimed to use highly advanced AI features to make shopping easier was actually powered by human workers in the Philippines and Romania, charges filed in court show.
Albert Saniger, 35, founder of the e-commerce start-up Nate, repeatedly made false statements to investors about the company's “proprietary artificial intelligence”, the US attorney's office in New York alleges.
His start-up raised $40 million based on the premise the technology made it possible for the Nate App to “autonomously complete customers' merchandise orders across e-commerce websites”.
“Instead, the transactions processed through Nate were, at times, manually completed by contractors in the Philippines and Romania and, at other times, completed by bots,” the court documents read.
The charge sheet says that Nate claimed to operate differently from other e-commerce platforms by making it possible for users to reduce the steps taken during the checkout process to a “single tap” where AI would take care of sizes, billing, shipping and other miscellaneous items.
More specifically, it is alleged that Mr Saniger and those who worked under his supervision at Nate falsely claimed that the process required “no human involvement”.
The company told investors that the lack of human involvement would pave the way towards scalability, and in turn, make Nate a sure-fire success.
“While the use of Al to automate purchases on Nate was always the goal, it was never the reality,” the indictment said.
Because Mr Saniger was unable to deliver on the AI promises made to investors, he instead opted to use human workers in the Philippines to mimic the process of AI automation, unbeknown to users.
A natural disaster in the Philippines, however, caused the whole deception to unravel, creating a backlog of purchases, and prompting the company set up a new “call centre” in Romania.
In the weeks and months that followed, problems with the Nate platform persisted, prompting complaints from customers and creating tension with investors.
In 2023, the company finally went bust, and investors were left scratching their heads, while also asking more questions about the AI claims made by Mr Saniger.
He is now facing charges of securities and wire fraud related to interstate commerce and employing a device to defraud. If found guilty, he could face a maximum sentence of 20 years in prison.
Mr Saniger is originally from Barcelona, Spain. Attempts to contact him and the Nate start-up were not immediately successful. The company's app, which debuted in 2019, is no longer available in the iPhone app store.
Similar headlines were made back in 2024, when technology media outlet The Information reported that Amazon's much touted “just walk out” grocery stores that largely eliminated the need for checkouts, were actually powered by thousands of contract workers in India who routinely had to step in make sure the frictionless checkout systems worked.
As the AI sector continues to explode in interest and investment, many companies both young and old are pivoting their advertising to promote artificial intelligence capabilities. Yet, with so many making that pivot, few of those claims are coming under scrutiny, at least for now.
The exact definition of what constitutes AI can also sometimes be murky with so many different developments and researchers trying to make sense of the burgeoning technology field.
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
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England v South Africa schedule:
- First Test: At Lord's, England won by 219 runs
- Second Test: July 14-18, Trent Bridge, Nottingham, 2pm
- Third Test: The Oval, London, July 27-31, 2pm
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match info
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