• The Justice Department has accused the former CEO of shopping startup Nate with fraud. Albert Saniger has been indicted and is accused of using human labor, but telling investors and customers the work was done with artificial intelligence.

Startup tech company Nate promised consumers easier shopping with the help of artificial intelligence. But the Justice Department says there was no miracle tech behind the checkout app’s transactions. Instead, they were handled by humans in the Philippines and Romania.

Officials at the U.S. Attorney’s office have indicted Albert Saniger, the former CEO of Nate, for defrauding investors with misleading statements about the firm.

“Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed.,” said Acting U.S. Attorney Matthew Podolsky in a statement. “This type of deception not only victimizes innocent investors, it diverts capital from legitimate startups, makes investors skeptical of real breakthroughs, and ultimately impedes the progress of AI development.”

The indictment comes after a 2022 report in The Information that claimed the company used human labor instead of AI.

The Nate app marketed itself as a simplified shopping experience for consumers, letting them “skip the checkout” process. The indictment gives an example of if a consumer found a pair of sneakers they wanted, they could open the Nate app and just click “buy.”

The company had said the transaction was completed by AI, but the indictment says the technology Saniger bought from a third party “never achieved the ability to consistently complete e-commerce purchases.” The actual automation, Justice Department officials say, was “effectively zero percent.”

Instead, Saniger allegedly hired hundreds of overseas contractors to complete purchases for the app. The company also used bots to automate some transactions, the indictment claims.

Saniger faces one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which also carries a maximum sentence of 20 years in prison.

This story was originally featured on Fortune.com

There is a scary truth that keeps every small business owner up at night: They are always one step away from bankruptcy.

Each year there is one event—it could be the loss of a key employee, a long-time supplier going out of business, or the impact of a natural disaster—but there’s one major shake-up that threatens to put them under.

This year, the event that will impact the majority of American small businesses is the threat of widespread tariffs.

Yes, tariffs on imported goods could cause some businesses to have a higher cost. But this isn’t necessarily the problem. Businesses often have changing costs, due to a wide variety of factors, and businesses can typically navigate through it.

The problem is the continuing uncertainty of the situation.

These broad-sweeping policy changes related to tariffs have been accompanied by mixed messaging. Business owners are left asking: Which countries are impacted? What is the new rate on my materials or finished goods? When does this go into effect? Is this a short-term negotiating tactic or a long-term policy?

Business owners are comfortable with making hard decisions. But in the face of uncertainty, small businesses are responding by hitting the pause button. What does this mean? They are freezing hiring. Job postings for open positions are being taken down and employees who leave are not being replaced. They are delaying investments. In the short-term, that means they are not buying inventory. More importantly, they are not investing in the future, striking investments in technology, facilities, and other infrastructure that is required to move a business forward. These moves will slow sales, and more importantly, hamper long-term growth and innovation.

For those businesses that have decided to be quick to act, the efforts seem somewhat short-sighted, along the lines of rerouting shipments through another country or adjusting the invoicing process with a supplier in hopes of reducing the impact of the tariffs on their product. It is hard to fault a business that is using their time and resources to cut costs, skirt the system, or chase down a loophole if it means they are able to continue to turn a profit. But this activity is not what makes America tick, as we have long relied on small businesses to spend their time and resources to innovate in the areas of product development, process optimization, and expansion of sales.

One action that I do not hear about is an interest in companies bringing back manufacturing to the USA. Being a domestic apparel manufacturer, I have a close ear to the ground for production needs and capacity in our industry. This is shockingly different from the response during the COVID pandemic, when companies small and large rallied around the idea of manufacturing in the USA, and many made significant strides to do so, even if only for a short period of time. In my world of apparel manufacturing, tariffs are going to hit many companies hard. At the same time, I know of three long-time manufacturing operations that are likely to close their doors in the coming months due to lack of demand.

How can small businesses survive the uncertainty of tariffs?

• Create structured frameworks to guide action. It’s clear that this will be a situation that continues to evolve, so having a defined process for gathering information, evaluating opportunities, and making decisions will help navigate ongoing change. Develop frameworks for hiring, purchasing, pricing, and other important business operations, and key metrics to keep them in line. If demand for your product slows, be ready to pull back on inventory purchasing and sales staff. If costs increase, have a plan to adjust price and increase the value to customers.
• Find creative ways to work with others. The collaborative efforts stemming from the COVID pandemic were not only inspirational, they were instrumental to the survival of so many American businesses. Partnering with a neighbor, supplier, or even competitor can add significant value and stability to a business.
• Stay alert and do not lose focus. Widespread tariffs may be the landmark event for a business, but similar to the COVID pandemic, the true test will come in the three to four years following the initial event, as the larger economy will undoubtedly see some seismic shifts in inflation, unemployment, interest rates, or other areas that can be detrimental to small businesses. In the meantime, stay dialed in on your customer, your product, and your business.
• Explore domestic options. For most industries, it is unlikely that a business can eliminate reliance on overseas manufacturing overnight. But even small businesses can begin to diversify their supply chain to lessen their exposure to potential tariffs or other events that could be catastrophic to a business.

American business owners are resilient, and many will survive these uncertain times. But I don’t know a single person who owns a business simply because they want to survive. They want to thrive. Small businesses are the backbone of the American economy and will only be able to continue to add value through innovation, job creation, and community involvement once the uncertainty around widespread tariffs has settled down.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Read more:

• The pursuit of ‘lean’ operations has left companies mercilessly exposed to the tariffs chaos
• Why I sold my family’s century-plus-old company to my employees
• Tariffs, AI, and a broken pipeline: The workforce crisis no one’s ready for

This story was originally featured on Fortune.com

• Tesla’s new rear-wheel-drive Cybertruck with only one motor costs $10,000 less but offers poor value for money, argue fans, who say buyers are better off with its dual motor, all-wheel-drive sibling.

Customers waiting to get behind the wheel of a more affordable Cybertruck have, at long last, an entry-level option courtesy of CEO Elon Musk. 

But they may be in for a sticker shock—all told, Tesla shaved only $10,000 off the price of the new rear-wheel-drive pickup while simultaneously stripping away a number of features prized by truck buyers. 

Although it comes with a slight increase in range, overall critical reception was muted at best, given that this third version rounds out the range, which was considered the final chance to reignite interest in what threatens to become a historic flop. 

With eight recalls in just about 15 months of production, the stiff price and perceived poor value for money make it the latest bitter disappointment for a once highly anticipated model that initially seemed poised to become Musk’s next breakout hit.

“We expect little if any incremental volume will be added to [Wall Street] Tesla delivery estimates as a result of the CT RWD addition,” wrote Gary Black, Tesla investor and managing partner of The Future Fund.

We estimate $TSLA will deliver just 20,000 Cybertrucks total in FY’25 vs 37,000 CTs delivered in FY’24. Given just a $10K price discount vs the CT AWD version and the removal of many CT AWD features, we expect little if any incremental volume will be added to WS Tesla delivery… https://t.co/sbzIE0AojM

— Gary Black (@garyblack00) April 11, 2025

What features have been shaved off the new Cybertruck?

Originally slated to start at $39,990 when it was first unveiled in late 2019 — just shy of $50,000 in today’s dollars — the new single motor Cybertruck expected to arrive as early as June weighs in at a chunky $69,990 before any U.S. federal tax credits.

In addition to losing the second motor driving the front axle, buyers can also say goodbye to air suspension, a previously standard feature that lifts up the chassis and helps when driving offroad.

In its place are adaptive coil dampers that do not offer the same high ground clearance combined with a lower towing capability. 

It also swaps out the premium vegan leather seats with ventilation for cheaper cloth and eliminates the rear console display for backseat passengers. 

The motorized hardtop tonneau, which extends from the top of the cab to cover the flatbed at the push of a button, is gone in favor of a soft material that unrolls by hand for a cool $750 added price.

Even the 240-volt power outlet in the bed that makes it attractive to craftsmen has been removed. 

The RWD Cybertruck does come with a longer 350-mile range, but those 25 added miles it gains are effectively a result of its smaller 18-inch rims.

If you upgrade to the 20-inch for an extra $3,500, the range drops back to 331 miles, only six more than the AWD version.

VIN data (Vehicle Identification Numbers) shows that Cybertruck performance version sales returned to normal in Q4 2024. Tesla pulled a clever trick in Q3 2024 to make the Cybertruck profitable for one quarter by holding back performance version deliveries from earlier quarters… pic.twitter.com/ctGdVNsDoO

— Troy Teslike (@TroyTeslike) January 5, 2025

Cybertruck sales could already drop in 2025

With all this content stripped out, even Tesla fans are choking on the price.

Instead of appealing to cost-conscious customers who couldn’t afford the more expensive dual motor or tri-motor, most believe the new single-motor version is designed to intentionally push them into upgrading.

“The AWD trim for $10k more is absolutely worth the extra cost compared to the new Cybertruck,” argued Sawyer Merritt, one of the leading members of the online Tesla community. 

Musk installed enough annual capacity in his Texas plant to build 125,000 Cybertrucks per year, with plans to eventually double that to 250,000 to meet what he claimed to be off the charts demand. 

Since deliveries began in late 2023, only about 46,000 have been sold. A number of analysts previously suggested that the million customers who had put down a deposit for one may have just been waiting for the low-cost entry version unveiled on Thursday. If so, they’re in for a rude awakening. Black estimates Cybertruck volumes will drop to just 20,000 trucks in 2025, in only its second full year of production.

What this means for profits is unclear.

Tesla did say that the truck had achieved a positive gross margin in the third quarter of last year, but retail analyst “Troy Teslike” who tracks production volumes ascribed this to a temporary effect stemming from an unusually large number of high priced models delivered in that period.

Tesla did not respond to a request from Fortune for comment.

This story was originally featured on Fortune.com