Theranos whistleblower Tyler Shultz warns that the AI boom is ‘a great opportunity to go deceive people’

Tyler Shultz, the former Theranos employee whose whistleblowing exposed the blood-testing startup's dangerously inaccurate devices, is warning that today's AI investment climate repeats the conditions that let his first employer deceive patients and investors. His remarks came in an interview with The San Francisco Standard, timed to renewed attention on Theranos from the documentary "You Can See Everything," directed by Nathan Fielder and Lance Oppenheim, which has become one of the highest-grossing documentaries of all time. The film covers Elizabeth Holmes' final weeks before prison and pointedly declines to frame her as either a master manipulator or a victim.

Theranos devices had reached Walgreens stores and delivered faulty results to real patients while the company reached a peak valuation of roughly $10 billion, despite its technology never functioning as claimed. The company ran only a fraction of tests on its own machines, outsourcing the rest to third-party equipment. Holmes is now in federal prison, and Shultz argues the current media fixation is self-generated: "the only reason we're talking about Elizabeth Holmes right now is because she wants us to be talking about Elizabeth Holmes right now."

What worries Shultz is the fundraising model rather than Holmes herself. "I think the days of having a thirty-minute coffee with someone and sending them $100,000 should be over. Elizabeth took that model and scaled it to $100 million," he told the Standard. His own family was entangled: his grandfather, former U.S. Secretary of State and Secretary of the Treasury George Shultz, was an investor and board member. Shultz argues investors must grasp that writing a large check confers "tremendous power" on the recipient.

Theranos' capital largely came from individual investors, including the DeVos and Walton families, rather than venture firms. The company declined to share scientific data or evidence its machines worked with prospective investors, citing trade-secret concerns — a posture that kept many top Silicon Valley VCs away. When the fraud surfaced, the episode was widely treated as a wake-up call pushing investors to prioritize due diligence.

Shultz's concern is that the AI era is eroding that lesson at a far larger scale: companies that have never turned a profit are raising capital at trillion-dollar valuations. What remains open is whether diligence norms strengthened after Theranos will hold as AI startups absorb unprecedented funding, and whether investor scrutiny of technical claims can survive the pressure to move fast in a market where capital often flows on reputation and momentum rather than verified evidence.