Instead of AI — hundreds of Filipinos: «smart» $88 million Nate app turned out to be a fake

The startup Nate promised customers one-click shopping thanks to AI, but in reality, hundreds of Filipinos placed orders manually.

Nate called itself «universal» shopping app with artificial intelligence. The startup was founded in 2018 as a place where you can buy goods online with one click — without filling out forms, card numbers, or delivery addresses. The wrapper is beautiful, but hundreds of Filipinos were literally hiding behind it.

«In reality, however, Nate relied heavily on hundreds of human contractors in a call center in the Philippines to manually complete those purchases», — the indictment said.

That’s why the US Department of Justice has filed fraud charges against Albert Seniger, the founder and former CEO of Nate. The U.S. Attorney’s Office for the Southern District of New York says that there was no automation in the app. In fact, the level of automation was close to zero.

Although Nate bought some AI solutions and hired data science specialists. None of this had anything to do with the real functionality of the app. However, the loud statements worked: by 2021, Nate had raised more than $88 million, with Renegade Partners, Coatue, and Forerunner Ventures as investors.

Everything started to fall apart when the company ran out of money. According to the US Department of Justice, in January 2023, the startup was forced to sell off its assets. Investors lost almost everything and suffered losses.

Nate had previously suspected that things were not really «pure». In 2022, they talked about the massive use of contractors. But now the information has been officially confirmed by federal investigators.

Is this the first time such a situation has happened? Of course not. In 2024, Amazon «burned down» on the fact that the Just Walk Out cash registers — «the triumph of AI» — was the result of the work of thousands of Indian workers. In addition, EvenUp — a law firm,, also passed off human work as automated, as did a number of companies from the Philippines.

Therefore, if the next time someone says that their service is powered by AI, where you don’t have to enter anything, you should be more skeptical. Perhaps, somewhere in Manila or New Delhi, another night shift is working right now.

Source: TechCrunch