AI Shopping Startup's AI Was Actually Just Low Cost Workers in the Philippines

Some startups are bold and original. And some, like Nate, had more modest goals: automatically filling out shoppers' contact and payment information on retailers' websites. In exchange for sparing them a minute or two of data entry on their phones, Nate charged shoppers $1 per transaction. But it struggled to turn even that vision into reality. The Information: While the company said it was using artificial intelligence to populate customer information during the checkout process, it had actually hired workers in the Philippines to manually enter the data on retailers' sites for a significant portion of the transactions Nate facilitated in 2021, according to two people with direct knowledge of the company's practices. That meant customers' orders were sometimes placed hours after they clicked the buy button through the Nate app. Nate didn't disclose its decidedly low-tech methods to at least some of the investors from whom the startup tried to raise money, according to a person with direct knowledge of fundraising discussions.

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