The Enterprise AI Failure Casebook

The SEC found Presto's drive-thru AI relied on human order takers abroad

The SEC found that Presto Automation described its Presto Voice drive-thru product as running on its own AI and eliminating human order taking, when another company's technology ran it at first and contracted workers abroad processed most orders.

Presto Automation Inc. · January 14, 2025 · Updated October 31, 2026

According to the Securities and Exchange Commission's order, in January 2023 a Presto executive raised concerns that Presto was "telling investors Presto AI is running 95%+ accuracy without disclosing AI is doing NONE of the work and all orders are processed by humans." In October 2022, a senior executive had messaged other executives that the company should not refer to "automation rate with customers because it infers no supervision which isn't true."

Presto Automation is a restaurant technology company in San Carlos, California. Its product Presto Voice uses AI-assisted speech recognition to automate parts of drive-thru order taking at quick-service restaurants. Presto went public in September 2022 by merging with Ventoux CCM Acquisition Corp., a special purpose acquisition company. Its stock traded on Nasdaq until Nasdaq suspended trading on August 8, 2024. In connection with the merger, Ventoux raised about 55.5 million dollars in a private placement. In May 2023 Presto raised about 9.5 million dollars more.

The order finds that from at least November 2021 to September 2022, every Presto Voice unit the company commercially deployed ran on voice AI technology owned and operated by another company, which the order calls Supplier A. The units served the restaurants of Presto's largest Presto Voice customer. Presto's filings called the technology "our technology" and "Presto's speech recognition technology." A January 2022 press release referred to the supplier once, saying the solution was developed in partnership with Hi Auto. Presto's executives understood that the supplier's system was supported by human agents to some extent. The order says Presto lacked a detailed understanding of the capabilities of Hi Auto's technology and of the human involvement it required.

In September 2022 Presto began deploying units on its own technology, while the supplier's units stayed in service. The original version turned a customer's spoken order into text and showed it to human agents Presto contracted at off-site locations, including in the Philippines and India. The agents entered every order. In five registration statements filed between October 21, 2022 and May 1, 2023, Presto said Presto Voice "eliminat[es] human order taking." Investor presentations reported "automated order completion" rates of 95% to 99% at its largest customer's restaurants and, in January 2023, "non-intervention" rates above 95%. The order finds those rates counted orders completed without restaurant staff, not orders completed without any person. A newer version piloted from June 2023 still needed a human agent to enter about 70% of orders through at least December 2023. In January 2022 one executive had messaged another that "with HITL [humans in the loop], accuracy is not a major concern."

The order finds that from September 2022 through December 2024, Presto had no established process for drafting, reviewing or approving its SEC reports, and no one at the company was formally responsible for their accuracy. After learning of the SEC's investigation, Presto disclosed the supplier and its use of off-site human agents in a filing on October 11, 2023. On November 17, 2023 it disclosed that over 70% of Presto Voice orders needed human agent intervention. On December 14, 2023 it said that at the substantial majority of locations running the original version, the figure was 100%.

On January 14, 2025 the SEC issued a settled order. Presto consented without admitting or denying the findings. The Commission found that Presto violated Section 17(a)(2) of the Securities Act and Section 13(a) of the Exchange Act and Rules 13a-11 and 13a-15(a). It ordered Presto to cease and desist. In accepting the settlement, the Commission considered Presto's financial condition, its remedial steps and its cooperation.

What failed

The SEC found that Presto made materially false and misleading statements to investors about its flagship AI product. From at least November 2021 to September 2022, every unit ran on a supplier's system, and the order says Presto lacked a detailed understanding of that system's capabilities and the human involvement it required. After that, Presto's own units depended on contracted agents entering orders, which the order says was well known inside Presto. Its filings described a product that eliminated human order taking, and no one at the company was formally responsible for their accuracy. An organization that uses or sells AI should keep an inventory that records which model or vendor actually does the work, and how much of the work people still do.

Sources

1. SEC, Order Instituting Cease-and-Desist Proceedings, In the Matter of Presto Automation Inc., Securities Act Release No. 11352 (Jan. 14, 2025), Section II, p. 1; paragraphs 1 to 3, p. 2; 6 to 8, p. 3; 9 to 13, pp. 3 to 4; 15 and 17, p. 5; 20, 23 and footnote 5, pp. 5 to 6; 25 to 27, p. 7; 29 to 30, pp. 7 to 8; 33, p. 8; 35 to 38, pp. 8 to 9; 43 and 44, p. 10; 48 and Section IV, p. 11