Startup Nate exposed as fake AI — Filipino workers did the job

The startup Nate, which positioned itself as a revolutionary AI-powered service for online shopping, turned out to be a large-scale deception. According to the US Department of Justice, hundreds of remote Filipino workers were manually placing user orders under the guise of artificial intelligence.

Nate promised users a seamless feature: find a product, click “buy,” and supposedly a neural network would complete the transaction. In reality, a team of operators manually entered card information, processed purchases, and tracked orders. All of this was presented as the work of advanced AI.

The deception is now the subject of a federal investigation. The US Department of Justice has officially charged the startup’s founder, Albert Saniger, with fraud, misleading investors, and misappropriating funds raised under the pretense of developing AI technologies. Investigators say Saniger raised tens of millions of dollars from venture capital firms, claiming Nate used cutting-edge machine learning algorithms.

This case is the latest in a series of scandals involving pseudo-AI startups. Similar schemes were previously uncovered — notably in the case of Amazon Go stores, where operators in India manually tracked customer movements instead of neural networks.

The Nate story highlights the growing gap between AI marketing claims and actual capabilities. Companies continue to use the buzzword “artificial intelligence” to attract investment and publicity, often without any real automation. This damages the reputation of the tech industry, especially as public trust in AI increases.

The Nate startup now faces legal proceedings, and Albert Saniger could face criminal charges. Investors have demanded refunds, and users are demanding answers. The scandal may lead to tighter regulations for AI startups and increased scrutiny from oversight agencies.

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