Nate’s AI Shopping App Was Fake: Feds Say It Used Philippine Workers

U.S. authorities have charged Albert Saniger, founder of the Nate app, with fraud, revealing that the supposed AI-powered e-commerce app actually relied on human workers in the Philippines to fulfill transactions.

Launched in 2020, Nate was marketed as a universal AI shopping cart, automating everything from entering shipping details to completing online purchases. However, court documents reveal that transactions were handled manually by hundreds of contractors in a Philippine call center.

“Saniger exploited the allure of AI to create a false narrative of innovation,” stated U.S. Attorney Matthew Podolsky. He emphasized that such fraud not only harms investors but also undermines genuine AI innovation by eroding trust.

Millions Raised Under False Promises

Saniger allegedly secured over $40 million in funding by convincing venture capitalists that the app’s backend was powered by advanced automation. Internally, employees were told to conceal the use of human labor. Though Nate had acquired some third-party AI tech, the app’s true automation rate was close to zero, according to authorities.

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In late 2021, Saniger instructed developers to build bots to automate parts of the process during the holiday rush. However, even these efforts were limited in scope and effectiveness.

Facing Up to 20 Years in Prison

The Department of Justice has charged Saniger with both securities fraud and wire fraud, each carrying a potential sentence of up to 20 years. The SEC’s civil complaint also seeks to bar him from executive roles in similar companies and demands the return of investor funds.

Nate ceased operations in January 2023, following media scrutiny of its actual capabilities. Saniger then terminated all staff, effectively shutting down the company.

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