apparently the plan was to use humans to train an ML system but it never ended up getting good enough to take over
If investors understood this process as RFID chips which is how I remember reading about it initially then yeah it 100% is fraud.
Actually thinking about it again I think my understanding of this might come from Ben Pack explaining it on the Giant Bombcast and I don't think he counts as a definitive source on the matter BUT they did this exact same shit with Ring and sold it as AI when instead it's people staring at video footage and drawing rectangles around objects, so I mean, I'm going to assume it's the same case here.
People are almost always cheaper than even solved, midranged computing if you have sufficiently-peripheralized people. Most "bot farms" are just a bunch of underpaid workers somewhere that the first world doesn't give a shit about, in front of a desk of secondhand office computers or mobile devices. Same for "automatic" image-labeling stuff.
If something is advanced, cheap, automated, and vaguely-futuristic, it almost certainly runs on blood, even if it could be invisibly done in a "better" way. Most people are already invisible.
So one of the things having an rfid chip in your hand makes you very aware of is that the range sucks, so I was suspicious of people saying rfid originally in the first place.
But this is still shocking.