SEC AI-washing order: Presto's drive-thru 'voice AI' needed a human on every order

The problem

“Voice AI for the drive-thru” was one of the flagship automation pitches of the 2021 to 2023 wave, and Presto Automation sold it harder than most: a September 2022 SPAC listing, filings claiming its Presto Voice product “eliminat[es] human order taking,” and investor materials reporting “automated order completion” rates of 95% to 99% (source). On 14 January 2025 the U.S. Securities and Exchange Commission entered a settled cease-and-desist order finding those statements materially false and misleading, its first AI-washing enforcement action against a public company (source). This is a verified negative: an independent federal regulator, in a signed public order, measured the gap between an AI-automation pitch and the system that actually ran (source).

What was built

Three layers, all from the order, to which Presto consented without admitting or denying the findings (source).

The “AI” was humans, in all instances. The original version of Presto’s own proprietary voice AI, commercially deployed from September 2022, “required human agent intervention, including entering the order, in all instances” (source). The system converted the customer’s voice to text, displayed it to human agents Presto contracted “at various off-site locations, including in the Philippines and India,” and those agents entered the order (source). The order is explicit that this was by design: the technology “was designed to rely on this human support and was not capable of processing orders without it” (source). Even the more advanced version piloted from June 2023 “required a human agent to enter the orders approximately 70% of the time” through at least December 2023 (source).

The automation metrics measured the wrong humans. Presto reported “automated order completion” and “non-intervention” rates of 95% to 99% (source). Per the order, those rates counted only orders completed without restaurant-staff involvement, so the off-site human agents entering the orders were invisible in the metric (source). Presto’s own executives flagged the problem internally: the order quotes one raising concerns in January 2023 that the company 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” (source).

For its first year, the AI was not Presto’s. From at least November 2021 to September 2022, every commercially deployed Presto Voice unit ran voice AI “owned and operated by Supplier A,” a third party, while Presto’s filings called Presto Voice “our technology” (source). The order identifies the partner via Presto’s January 2022 press release, which mentioned developing the solution “in partnership with Hi Auto” (source).

The outcome

Actual human intervention on the original proprietary version: in all instances. The system could not process orders without a human entering them (source).

Human intervention on the advanced 2023 pilot: approximately 70% of orders, June 2023 through at least December 2023 (source).

What was claimed instead: automation rates of 95% to 99% and product statements that Presto Voice “eliminat[es] human order taking” (source).

The offerings raised while the statements stood: a $55.5 million PIPE and a $9.5 million private placement (source).

The sanction: a cease-and-desist order and no civil penalty. The SEC found violations of Securities Act Section 17(a)(2) and Exchange Act Section 13(a) and Rules 13a-11 and 13a-15(a), and imposed no civil money penalty, citing Presto’s cooperation, remedial efforts, and financial condition (source).

The unraveling followed the investigation. In a Form 10-K filed on 11 October 2023, Presto first disclosed the off-site human agents (source). A 17 November 2023 prospectus supplement disclosed for the first time that “over 70% of orders taken by our Presto Voice solution require human agent intervention,” and a 14 December 2023 filing clarified that even that figure covered only the advanced-pilot locations: at the substantial majority of locations, human intervention was required on 100% of orders, with an 85% non-intervention rate across restaurants on Presto’s proprietary technology (source). Nasdaq suspended trading in Presto’s stock on 8 August 2024, and the Form 15 terminating its registration became effective on 18 December 2024; the cease-and-desist order followed on 14 January 2025 (source).

How this was verified

The critical figures all originate with the SEC in a signed order, framed throughout as the Commission’s findings, which Presto neither admitted nor denied (source). Every figure on this page was quote-verified against that primary order on 2026-08-13 via its publication-week Wayback capture (timestamp 20250117024644), because live sec.gov rate-limited this session; the capture’s CDX SHA-1 digest is unchanged across captures from January to April 2025, so the archived copy is byte-identical to the order as published. Two independent legal-press relays carry the order’s key findings firsthand and were both re-checked live on 2026-08-13: The D&O Diary (Kevin LaCroix) and Cooley PubCo (Cydney Posner). The honest limit is that the “AI” here was measured by the regulator, not by TIN, and the dollar figures for the PIPE and private placement are the offering proceeds as stated in the order, not audited net proceeds.

Related case files

The same SEC AI-washing sweep produced the Delphia and Global Predictions orders, where advisers overstated their use of AI to investors and paid civil penalties, so the two read as the enforcement bookends of the same theory. The pattern of a claimed AI accuracy rate colliding with the measured one recurs in Workado’s AI content detector, which advertised 98% accuracy against an actual 53% and drew an FTC order. And the denominator trick, an automation rate defined so the humans doing the work do not count, is the mirror image of Klarna’s AI assistant walk-back, where the headline “work of 700 agents” figure was a modeled equivalence rather than a measured headcount.

Sources

Tier 1 = the party stating its own metric on record or a regulatory/court document. Tier 2 = independent reputable press naming the parties. Each figure was quote-verified against the primary order on 2026-08-13 (live sec.gov rate-limited; primary read via its byte-identical Wayback capture).

1. U.S. Securities and Exchange Commission, “Order Instituting Cease-and-Desist Proceedings: Presto Automation Inc.,” Securities Act Release No. 11352 / Exchange Act Release No. 102177, File No. 3-22413, 2025-01-14 (Tier 1, the signed regulatory order that makes every finding on this page). https://www.sec.gov/files/litigation/admin/2025/33-11352.pdf · archived
2. Cooley PubCo (Cydney Posner), “SEC charges ‘AI-washing’,” 2025-01-30 (Tier 2, independent securities-law press quoting the order’s findings firsthand). https://cooleypubco.com/2025/01/30/sec-charges-ai-washing/
3. The D&O Diary (Kevin LaCroix), “SEC Files AI-Washing Enforcement Action Against Restaurant Technology Company,” January 2025 (Tier 2, independent D&O-liability press relaying the order). https://www.dandodiary.com/2025/01/articles/artificial-intelligence/sec-files-ai-washing-enforcement-action-against-restaurant-technology-company/