AI Startup Nate’s Former CEO Accused of Fraudulent Automation Claims

Albert Saniger, the founder and former CEO of the AI-based shopping automation app Nate, who promised a “universal” checkout experience, has been charged with defrauding investors.

He allegedly spoke of existing AI innovations while secretly hiring staff to create the illusion of technological automation, according to a press release from the U.S. Department of Justice.

“Albert Saniger misled investors by using the promises and allure of artificial intelligence technology to create a false impression of innovations that never existed,” stated Acting U.S. Attorney Matthew Podolsky.

Founded in 2018, Nate raised over $40 million from various investors, including Coatue and Forerunner Ventures.

The company claimed that its AI allowed users to make purchases at any online store with a single click “without human intervention.” In reality, Nate’s operations relied on hundreds of people working in a call center in the Philippines, who manually processed transactions, the prosecution alleges.

Despite acquiring some AI technologies and hiring data processing specialists, the actual level of automation in Nate’s app was 0%, the Justice Department reported.

In January 2023, the company ran out of funds and was forced to sell its assets, leaving investors with losses.

The 35-year-old Saniger faces one count of securities fraud and one count of wire fraud, each carrying a maximum sentence of 20 years in prison.

Back in 2022, Nate was suspected of using workers from the Philippines for manual transaction processing.