Phia Founders Knew of AI Scheme for Months

Phia co-founders Phoebe Gates and Sophia Kianni allegedly knew about their AI shopping browser extension's fraudulent cookie stuffing for at least seven months, contradicting earlier claims of recent discovery. Internal Slack messages reviewed by Bloomberg reveal the founders monitored the remotely toggled feature.

This scheme, known as cookie stuffing, falsely claims affiliate commissions on purchases not driven by the extension. By June 2026, it reportedly accounted for 51% of Phia's claimed merchandise value. Once disabled, daily revenue collapsed significantly.

Legal experts have highlighted the severe potential consequences, noting that cookie stuffing is typically treated as federal wire fraud in U.S. courts, with penalties up to 20 years in prison. No criminal charges have been filed against the founders as of publication.

The extension employed three features to inject Phia's affiliate referral code, overriding other referral links and ensuring Phia received commissions. These mechanisms were deliberate engineering choices, not accidental bugs.

Phia has denied some of Bloomberg's claims, is reversing transactions, and has hired a compliance head. However, their statement did not acknowledge the founders' prior knowledge of the scheme.