Theranos Whistleblower Warns AI Boom Could Create Room for Deception

Former Theranos employee Tyler Shultz warned investors may struggle to assess what artificial intelligence products do, saying the difficulty of judging what is new can leave room for deception.

Shultz said investors may not know whether a product offers new technology or builds on models that already exist. “If you want to deceive people, I think this is a great opportunity to go deceive people,” he said in an interview published Friday, Oct. 30. He did not name an AI company or a specific fraud case.

Shultz worked at Theranos and helped expose problems with the company’s blood-testing technology. Theranos founder Elizabeth Holmes was convicted by a jury in January 2022 of one conspiracy count and three counts of investor fraud. She was sentenced to 135 months in federal prison that November.

Trial evidence showed Theranos’ analyzer could handle only a few basic tests. The company also relied on conventional lab machines for some tests it had represented as being processed by its own analyzer.

In a 2018 complaint, the Securities and Exchange Commission alleged the device could run about 12 of more than 200 tests on Theranos’ published menu. Theranos and Holmes neither admitted nor denied the allegations in the settlement.