AI is easy to fake, Theranos whistleblower Tyler Shultz tells SF Standard

Tyler Shultz helped expose the blood-testing fraud at Theranos. He now says AI is hard to vet, and investors need to do real due diligence. Few laws govern AI, he added, which makes it hard for people inside AI companies to blow the whistle.

Shultz spoke to Theo Baker on The San Francisco Standard ’s PST podcast. Baker was sitting in for the host, Emily Dreyfuss. The interview comes as a new film has put Elizabeth Holmes back in the news. “You Can See Everything”, by Nathan Fielder and Lance Oppenheim, follows the Theranos founder’s last weeks before prison.

Baker asked whether the flood of money into AI raises the risk of another Theranos. Shultz said capabilities a company does not have, or may never have, are not hard to fake.

“It’s really hard to tell the difference between what is like something truly unique and new versus like a ChatGPT wrapper,” Shultz said.

Anyone who wants to deceive people has a great opportunity now, he said. Investors need to keep their guard up.

“I think the days of having a 30-minute coffee with someone and sending them $100,000 should be over,” he said.

Holmes took that model and scaled it to $100m, raising what Shultz called the biggest angel round of all time. On paper, the Theranos investors were the victims, he said. In his view, they were also enablers. Their lack of due diligence handed her power she should never have had.

The Theranos whistleblower also spoke about people at AI labs who raise safety concerns. The topic is live: this week twenty House Democrats wrote to OpenAI about its fired safety researchers. OpenAI had checked their phones for Signal chats, The Wall Street Journal reported. This month, former lab insiders gave evidence at a New York City hearing on AI.

“The NDAs and the non-disparagement agreements that many of these tech workers have signed are so incredibly overbearing and I would say likely illegal even,” Shultz said.

At Theranos, he signed several frightening NDAs. He thought he could not talk to a lawyer or a regulator, he said. He used a fake name and a fake email address to contact regulators. Workers need to know they can go to regulators and lawyers, he said. Some lawyers take whistleblower cases on contingency. He said he is now working to make those resources easier to reach.

Shultz worked at Theranos as a scientist and raised concerns with managers, executives and a regulator before helping a Wall Street Journal reporter. Holmes and Ramesh “Sunny” Balwani went to prison about three years ago, on sentences of more than 11 years and nearly 13 years.

He called the film a masterpiece but said it was not a documentary, because it pursued ambiguity rather than truth. He also said Holmes is preparing a second act. Haemanthus, the blood-testing start-up run by her partner Billy Evans, says Holmes has no role in the company, Fortune reported .