Albert Saniger, founder and former CEO of fintech startup Nate, was indicted for allegedly defrauding investors by falsely claiming his e-commerce app used advanced artificial intelligence. Prosecutors allege that, despite raising $40 million on the promise of custom AI-powered checkout technology, Nate actually relied on overseas human workers to process transactions. Saniger allegedly instructed staff to keep this secret and misled investors about the app’s capabilities, even as disruptions in the Philippines led to a backup call center in Romania. After the company collapsed in 2023, investors suffered near-complete losses. The Nate case highlights the growing role of cheap human labor in so-called AI startups and broader concerns about misleading practices in the technology sector.
