Funny, Sad: CEO Charged After “AI” Turns Out to Be Humans in the Philippines

[TomPluz]

A tech founder who raised over $40 million pitching a cutting-edge AI shopping app has been charged in the U.S. with fraud after it was revealed the AI powering the app was a call center full of human workers in the Philippines.

Albert Saniger, 35, founder and former CEO of “nate,” allegedly misled investors by claiming the company’s e-commerce app used proprietary AI to automate online purchases.

“Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed.”

You can read more of this news at Decrypt.co.


Just like the famous and jailed Elizabeth Holmes of the Theranos scam, Albert Saniger found a way to compensate when he realized that the AI technology he was so proud of promoting back then turn out to be non-existent by outsourcing to real humans. In other words, he deceived his own investors and users to think that AI he developed is doing the job when in fact it is not. Though am glad that he turned to the Philippines for outsourcing since this country can really handle the job even better than India and other countries. Just like FTX, this man's story can be quite interesting and is a survey of human nature and how we use deception just to be successful...and the endgame can be a big disaster.

[bitterguy28]

A tech founder who raised over $40 million pitching a cutting-edge AI shopping app has been charged in the U.S. with fraud after it was revealed the AI powering the app was a call center full of human workers in the Philippines.

Albert Saniger, 35, founder and former CEO of “nate,” allegedly misled investors by claiming the company’s e-commerce app used proprietary AI to automate online purchases.

“Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed.”

see now this is something that ai can't think of lol humans are quite resourceful even if it is for the wrong reasons such as this one he would have made more if he did not get caught because maybe humans could have done the same job as ai almost

maybe using ai would actually be a lot more cheaper though i suppose since he was hiring workers from a third world country, it would have been cheaper

Though am glad that he turned to the Philippines for outsourcing since this country can really handle the job even better than India and other countries.

i do not think it matters which country he used he probably just went to the philippines because he would not have to pay that much this is a weird thing to brag about what would even happen to these workers? did they know they were scamming some investors or were they told something different?

[LogitechMouse]

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Just like the famous and jailed Elizabeth Holmes of the Theranos scam, Albert Saniger found a way to compensate when he realized that the AI technology he was so proud of promoting back then turn out to be non-existent by outsourcing to real humans. In other words, he deceived his own investors and users to think that AI he developed is doing the job when in fact it is not. Though am glad that he turned to the Philippines for outsourcing since this country can really handle the job even better than India and other countries. Just like FTX, this man's story can be quite interesting and is a survey of human nature and how we use deception just to be successful...and the endgame can be a big disaster.

Well, Philippines has been connected yet again, but in a negative way.

This is the reason why foreigners always go to the Philippine people when it comes to freelancing. The minimum wage here in the main capital in our country is around $10.74 per day, and I know that as long as they have the skill, they will get even the hourly wage will be at around 2-3$ per hour because that would be even higher than they're earning. On the flip side, other people or I should say clients are abusing this by hiring them, and then underpaying them. I know this isn't applicable for all, but I'm talking about the general side of it.

Now for the scam, it's unfortunate that our countrymen is being involved (although I know that they will not go to jail), but it's good that this scam has come to an end already. There really will be people that will maximize the hype around AI, eh?

[Stompix]

There really will be people that will maximize the hype around AI, eh?

This is an old one, it's from the first wave of AI, the company received the funds form investors way back in 2018.
The actually funny thing is that nobody cared how it worked, the problem was that it failed to even bring customers that's why the investors started the lawsuit, the whole idea was kind of stupid from the beginning, basically letting an AI complete your purchase. I mean, common...who will pay for an auto-complete?

For example, if a consumer found a pair of sneakers that they wanted to purchase on a particular e-commerce site, the user could buy the sneakers by opening the nate app and clicking “buy.” The nate app purported to take care of the remainder of the checkout process through AI: selecting the appropriate size, entering billing and shipping information, and confirming the purchase.

[Jating]

Yes, that is the sad part here, the technology that we have thought will revolutionized everything is also being used by such criminals. So very genius of him, but at the end of the day, no one is going to run away if you are stealing money from unsuspecting victims. And not just in crypto, in every services as well. There could also poise a problem with crypto based gambling sites who might be their users using AI to get away from KYC.

[Baofeng]

According to the article:

Saniger has been charged with one count of securities fraud and one count of wire fraud, both of which carry a maximum sentence of 20 years. The U.S. Securities and Exchange Commission has filed a parallel civil action.

So possible 20 years sentence for him, and the winner here is the people being hired to be an AI from our country Lol. Just shows though that Filipinos are very resilient in covering this supposedly AI that their project should be.

But good riddance to him, again, 20 years is a long sentence, but we all know that justice should be served.

[Gposas]

The news sounds a little bit funny, interesting and sad altogether. What could have motivated him to lure investors on something unreal? It is obvious that most Investors would dig down deep to know about their investments in a certain project.

On the other hand, it's funny that the Philippine guys involved were able to carryon this false AI stuff till exposure, lol. It is clear that if the workers involved couldn't deliver the job, the man would have been caught earlier.
That simply means man is always above the AI.

Lastly, the man is now left alone to suffer his penalties all by himself. The news entails a form of greed also.

[Aanuoluwatofunmi]

I don't see any crime in doing this, he uses humans instead of AI, i think they would have appreciated him more better than the y they are calling him for what he did, we can make use of an AI and when things go beyond their capacity, such could be transferred to an online customer agent who is human, things are fast developing now and we must wake up from the old patterns of how we handles things.

[target]

Saniger committed fraud to his investors. Filipinos are not going to be part of it if he wasn't hiring. It wasn't billions though so 20 years might just be too much.

I wonder which call center and will the company going to be called to stand trial. There are hundreds to thousands of it here, my nieces been moving from call center to another almost every 3 months just to see which one pays more.

[Faisal2202]

Just like the famous and jailed Elizabeth Holmes of the Theranos scam, Albert Saniger found a way to compensate when he realized that the AI technology he was so proud of promoting back then turn out to be non-existent by outsourcing to real humans. In other words, he deceived his own investors and users to think that AI he developed is doing the job when in fact it is not. Though am glad that he turned to the Philippines for outsourcing since this country can really handle the job even better than India and other countries. Just like FTX, this man's story can be quite interesting and is a survey of human nature and how we use deception just to be successful...and the endgame can be a big disaster.

This CEO was playing a very dangerous game, I did not read the whole story but if the CEO have that much money to pay to the workers to do the job, than why did he not used that money to automate it using AI as it is not impossible to do that.

I guess, his intentions was to make it AI, but things turns out to be wrong way or he was wrong from the start well, let's left that part for the authorities.

But this really gives an idea to other competitors that if they want, they can compete in this niche with AI (real one) and can get huge investors too.

[yhiaali3]

I wonder how he managed to raise over $40 million by promoting a sophisticated AI-powered shopping app? I mean, that's a pretty significant amount for this service. How many users did he manage to deceive to raise that much money?

If he had been smart enough, he could have allocated $1 million or more to an AI programmer to develop a real app for him instead of continuing to scam. Since he was able to promote his fake app in advance, he could have capitalized on this promotion and created a real app instead of continuing to scam and lose business.

[Zed0X]

I wonder how he managed to raise over $40 million by promoting a sophisticated AI-powered shopping app? I mean, that's a pretty significant amount for this service.

People are inherently lazy and always prefer convenience over some extra work right? A lot of people are also gullible and believe in tech stuffs that they do not understand. Those are probably the things that these investors were banking on when they gave him the money.

[rby]

There really will be people that will maximize the hype around AI, eh?

This is an old one, it's from the first wave of AI, the company received the funds form investors way back in 2018.
The actually funny thing is that nobody cared how it worked, the problem was that it failed to even bring customers that's why the investors started the lawsuit, the whole idea was kind of stupid from the beginning, basically letting an AI complete your purchase. I mean, common...who will pay for an auto-complete?

I Thought as much. I was wondering why someone would be willing to employ humans instead when he could use AI, which is way cheaper, especially considering the fact that he still has the whole AI idea in his head. Well, people only got attracted to it because they believed in the technology that would do everything for them. Though that sounds stupid, they were lied to.

[NotATether]

I guess he couldn't even afford a ChatGPT Pro subscription 

There are many companies developing autonomous AI agents that will do tasks on the internet for the user (to the detriment of captcha checkers everywhere), so I don't get why he didn't just strike a commercial deal with one of them.