Online shopping app Nate claims to use AI for shopping but actually uses cheap human labor in the Philippines

Some startups are bold and original. And others, such as Nate, have set themselves more decent goals: retrieving customer contact and payment information automatically on retailer websites. In exchange for saving one or two minutes typing on their phone, Nate charges buyers 1 per transaction. Although the company says it uses artificial intelligence to fill in customer information when ordering, it actually hired staff in the Philippines to manually enter data into retailer websites for most transactions. Which helped Nate in 2021, according to a thorough investigation by The Information.

If you don’t mind filling out your credit card and address details when buying jeans online, the Nate app sounds like a service you might be interested in. The company bills itself as an artificial intelligence startup that uses AI to auto-complete customer information for $ 1 per transaction, saving shoppers minutes when shopping through the Nate app.

But instead of using high-tech methods to make purchases, according to an in-depth investigation by The Information, Filipino workers often handled net transactions manually. Speaking to two people with direct access to Nate’s internal data, The Information reports that shares of the Nate transaction have been processed manually instead of automatically changing between 60% and 100% throughout 2021. A person familiar with the fundraising effort told the media that the company did not share its manual process with some potential investors due to its fundraising efforts.

People with direct knowledge of the technology used by Nate have told The Information that bot blockers are a problem on retail sites. According to The Information Article, Nate’s software had to figure out specific buttons on the page, such as the “Add Item to Cart” button, which meant that a large portion of the transaction had to be entered manually. 6 by real people According to The Information, some orders were placed within hours of Nate users pressing the “Buy” button. This has not stopped Nate from collecting millions in her search for something already simple and even easier. Venture capital firm Coatue Management and Forerunner Ventures have invested $ 50 million in Nate over the past two years.

One consequence of the epidemic-fuel shopping boom is that venture capitalists (facing intense competition for contracts and paranoid to miss the next strip) have virtually started pumping money into startups that have promised to facilitate e-commerce, even those who are skeptical. Business model or technology. Today, against the backdrop of e-commerce sales slowdown and macro-economic challenges, many startups are facing a challenge.

Across the startup landscape, there is a perception that many companies had a great story, but not reality. “People are waking up and saying these assessments can’t be sustained,” Keval said. Desai, an investment partner of Intervest who previously supported e-commerce companies such as The RealReal.

Late last year, with just 100 transactions a day, Nate decided to run a campaign to buy ads on TikTok, TV and public transport to increase its business and presence. When users download the Nate app and create a profile, they get $ 50 to spend on specific websites and 10,000 transactions per day. But users created multiple accounts with the same banking information, but found a way around the system using new email addresses and phone numbers. After the company removed duplicate users and ended the campaign, daily transactions dropped to 75 or 100 per day.

A Nate spokesman told The Information that those numbers, with a range of 60-100%, were incorrect, and that claims involving Nate’s proprietary technology were “completely unproven.” However, this is not the first time that a startup has claimed that machines are responsible for human actions, and it shows the magic of the net in a whole new light.

Source: Information

And you?

What do you think about this practice?
Does Nate’s case confirm that the term AI is more of a marketing weapon than anything else?
Do you think Nate is honest in the way she presents her services?

See also:

Pseudo-AI: Technology companies prefer to use people and leave them as artificial intelligence

Clearview AI Big US government plans to hire more to secure contracts, controversial facial recognition startup wants to offer new features

40% of Europe AI startups do not use artificial intelligence, is AI an argument to attract investors?

There’s a startup that claims to rely on AI to automate app development, but actually uses people as a backdrop.

In Finland, a start-up used AI to train prisoners in prisons

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