This is
the biggest scam we've ever covered. This is insane. This ghost town of a warehouse
is filled with active build tickets. Dozens of power supplies,
video cards locked in cages. And there are several areas
where it's as if it was frozen in time. Build stations
remain as in-progress worksites. Even the employees' drinks and lunch
were left behind, and bins remain partially unpacked from a team
that was once excited to move into this brand new multimillion dollar warehouse
that was customized for them. The computers you're seeing,
those are still due to customers today, including some who are probably watching
this video right now. We got inside of the foreclosed Artesian
builds offices and what turned out to be one of our biggest investigations yet
as we try to unearth what went wrong for many of the customers
who got screwed by artesian builds. This video is brought to you by us
and store.gamersnexus.net. This is our most in-depth
investigative journalism piece yet. And to commemorate the death of Artesian
and our deep dive, we're launching a new limited edition
PC component, skeletal shirt. This shirt is in our limited line of ultra
shiny foil shirts, and we've only done a few shirts
like this before. The new skeletal foil uses water cooling
tubes, complete with terminating fittings and three-way junction splits
to form an accurate rib cage. This is alongside individually sleeved
cabling, connecting to inductors and mousepad centrally. The heart is made out of a GN logo
with a golden pump cap bordering an RGB strip with extensive attention
to detail a lot on the back. These super comfortable 100% cotton shirts
run a voltage regulator module design down the spine with a similar blue
and silver foil to stand out. Our limited foil designs always sell out
fast and we will not make them again. So go to store.gamersnexus.net
to grab one today and help fund our next deep dive
investigative journalism piece. Thank you for your support. Hopefully I don't get arrested. I'm not doing anything wrong,
but it's definitely not normal. Artesian builds went from being a robust, prebuilt
PC manufacturer with two locations and 60 to 70 employees doing $20 million a year in revenue, to a bankrupt warehouse
with over $1,000,000 of inventory still locked up
and still owed to customers today. People who will never see the PCs
they ordered and who will never get
their RMA'd repair units that are stuck inside. The computers
that were in here -- they had been sitting in here for months. And that includes, again, repair units
that existing customers sent in for repair with their personal files, work
files, family photos, tax documents , anything like that, stuck,
trapped on the systems, imprisoned, where they will never be able to get them back
because all of it is being sold at auction. As for how any of that happens,
how you go from 20 million a year in revenue to bankrupt? Well,
a lot of that is because of this guy. And unfortunately, the follower count is extremely,
extremely flat. Yeah. No, that's that's I know. Is an ambassador giveaway. This is not for people that aren't taking
streaming seriously. We need you to be promoting, frankly, yourself and us
if we're giving you a free computer. We run the contest. We make the rules. It's a slight change because we don't want to give
because people that quit playing the game. This is an ambassador giveaway. And you've got to be collaborating
with my company to get my free computers. Sponsored by Intel. Thanks, Intel.
(Thanks, Steve) Even though that now infamous live stream
was an absolute trainwreck. It's not the only reason Artesian
Builds went out of business. They were doomed a long time ago. And today we're going to be showing you
the collapse of Artesian builds from the inside. This was one of their two old locations. The last time we were here
was one day after the implosion of our artesian builds. And now we're back to see how it's gone. The last time also was right
when Artesian fired all of its staff
via Twitter, without notice, publicly. That was how they found out
that they lost their jobs. That -- that wasn't super-impo--
OK... Even with that expensive office build an artesian
had every reason to make this work. They were shipping upwards of 800 prebuilt computers every month. They went from doing $0 to $2.2 million in revenue in just two years. By the third year in business, the year
they shut down, they were doing 20 million in revenue. They were on track
for 30 million of revenue in the fourth year up until CEO
Noah Katz ran it into the ground today. Then Artesian
Build still owes about 800 builds and about $1.8 million to its customers. And that's not counting whatever it or its owners will owe once
the pending lawsuits conclude. When we were investigating this, we found
that about a dozen or so former employees noted to us that they had not received
the entirety of their last paycheck . And we also are aware of at least one
active lawsuit currently
being taken against Artesian Builds or its owner,
who now has to navigate the waters of making sure he hasn't accidentally
pierced the corporate veil somewhere. So that brings us to
just some of the indicators of where the troubles lie with our artesian
and builds at this point. But there are many more, and not all of them are purely personnel
and they are issues. We should probably start by saying
how we got into the warehouse. Since we've already heard that Noah Katz
apparently wants to sue us for defamation, among other things,
as if we're the ones who said this with a record of zero
purchases and a falling off following, we're going to be redrawing this name. Or who said this? Oh, I'm a Dumbo or did this. It was all above board. We contacted the brokers
and by proxy, the landlord, and they were more than happy
to accommodate us. And if you guys can just like
make sure you if it's okay with you, if you guys can just make sure you're
either photographing or videoing the inside of the place
as soon as we can. Yes. You appreciate it. Pictures and stuff. Okay. Well, this is especially because artesian
shut down within days of moving into
and occupying the new space, leaving the landlord and the brokers
without a tenant after a lot of customization and months
of work and construction went into it. So it's not much of a surprise that they were happy to talk to us
about their former or would be tenant. And we also got information from staff
and from companies slack logs, which included information
from Noah himself, from the Slack logs. So let's talk about what really went wrong
when the former CEO wasn't busy going out of business
and leaving landlords without a tenant, he could be found recalling pay
from contractors and employees, putting them into debt
in their personal PayPal accounts. And what seems to those of us
who aren't lawyers to be fraudulent or potentially illegal. We'll come back to the more serious evidence like this
that we've accumulated a little bit later. Artesian was run by an eccentric man
with unique tastes. He modified the small form factor
case by allegedly purchasing real dinosaur bones and arts and crafts, gluing them to the chassis
and what was supposed to bring to life this render of a dinosaur bone case
commissioned from an artist. Now, that's not quite as unique
as the $300,000 Tyrannosaurus skull used and marketing attempts
to customize builds. But it's still pretty unique. Artesian was a company that found more
success in its core PC building business than it knew what to do with mostly built
on the back of its unfortunate team. And yet, instead of focusing
on getting pieces out the door, it tirelessly tried to expand
into irrelevant categories. The company played with selling home
goods like cheesecakes ordered direct to consumer jigsaw puzzles of PCs,
cutting boards and slippers, painting a picture of a company run
by lost leadership unaware of the unthinkable success it had already
inadvertently stumbled into. And the leadership
wasn't only lost and bizarre home goods. Its founder and CEO is also obsessed with
the idea of Internet fame and celebrity. This is something we experienced
firsthand and entirely inappropriately when trying to interview him about the downfall of his company
in the days before it closed. I'm an influencer. I'm also an executive. And don't just take our word for it. In the company's internal slack. When employees were begging the CEO
to please apologize for dismissing and disrespecting smaller creators,
he made statements like these when confronted by employees that publicly
disrespecting the free market. Investors
whom Artesian referred to as Ambassador Cats said to his staff, Wait, what? They're my buddies. What the fuck? If they aren't, that's the whole problem. That's the whole problem, guys. Am I not being clear? In the internal server,
he continued, stating, quote, I. Literally built
this brand to be their friends. That's the whole point of being live. I want them all to know me. This aligns with the other actions
Artesian took. Katz's personal assistant, for example,
stated in the company's slack that during a fiery debate with the CEO
that views on SUVs were purchased. We later learned from the staff that this
was during West Coast builds going live. Particularly the CEOs
or other people close to him. For all of the public issues
that we already know about, like insulting smaller creators
who are doing free marketing for our teams and for the chance to maybe want a PC
if they're popular enough . There were more issues internally that weren't revealed really
until we started digging into them. So the first person, of course, who knew about the company's
impending demise was CEO Noah Katz. This is not a surprise. And in the final days of our season's
life, the CEO set to withdraw an approximately $10,000
from the company's PayPal account. And this is information that we have
verified through bankruptcy hearing records that are filed with the court
that we were able to obtain. So with the walls closing in around him,
the CEO began clawing back money that was paid to contractors
and staff in every way possible. A former staff member named Abby
is currently in debt 30 900 GBP on her PayPal account,
or about $4,700 U.S.. This is because what was left of artesian
or artesian futures or whatever it is now. Recall that all payments made to her
during the tumultuous downfall of the company. PayPal sided with Katz
because of the company's size, probably, and presumably because they didn't know
that it was going under. And because Abbi doesn't know
anyone who really works at PayPal, she's kind of screwed. She's in the UK. She's not able to really feasibly. Sue Katz, who likely has no money left
anyway. PayPal would be the only avenue
the PayPal cases show to dispute one for $2,965 or so US and one for $2,570 US. We obtained the text logs between Abby and Katz,
where Katz, shown on the left is told that with the CEO Nick having departed,
Abby will need to send the invoice to him. This all happened in December. Katz pays the amount in December of 2021,
well before the collapse, and the thread revives in May of 2022, after everyone
had already been publicly fired. Abby kindly suggests probably to kindly
that the text thread serves as evidence for the dispute and asks Katz
to keep things amicable at the end. He refers Abby to his lawyers,
and just for the record, we have emailed
the CEO's lawyers for comment, but at this time at least the film
and we haven't heard back. Now, this isn't the only charge. Back at one time,
especially early in the year, artesian billed was in desperate
need of GPUs in order to complete build that were partially assembled but
could not ship due to the GPU shortage. And this will build
into a much bigger issue that we'll get to later on
where the company had upwards of millions of dollars of inventory,
which we verified on the balance sheet, sitting, waiting to ship and unable to
because it was missing a GPU. So the company ties up all this money
and all these builds and cannot actually ship them, creating
just a massive liability sheet. So as a result of this, artesian
started seeking GPUs from employees and from eBay because they needed them
to sell the actual built. There's nothing inherently wrong with buying the GPU
from an employee of the company. If the company and the employee
come to an agreement about it, that's completely fine. The problem is the payment of it. And by the way,
there is also mining pieces being sold from AB mining, but that's a later story. One particular employee paid about $1,120
USD for the 3070 ty and then sold it to his employer
Artesian Build, which then went on to sell the GPU in a build upgrade
for 1500 dollars at the company. So they did while
they made some money on it in May of 2022, cats or whoever is handling his finances
at this point. Challenge to the transaction on PayPal
and claims to PayPal that the transaction was fraud. That's ironic. PayPal sided in favor of Artesian and Katz
or his money managers once again and clawed back
the money from the former employee who is now short both a GPU and $1,120. In another scenario that was similar,
artesian builds previously purchased the GPU
from one of our viewers on eBay and that viewer sent us
all this documentation. This order was placed in January of 2022 for an RTX, 3080
TI priced at $2,250 at the time, the order was shipped
to Artisan's West Coast warehouse and it wasn't assured, meaning
that there was a signature of receipt. If you look at the receipt, which we have,
it was actually purchased by a be mining or artesian builds mining
making this potentially even scam here. The dispute was filed on May 25th, meaning
it was four months. After receipt of the GPU. So the GPU is long gone at this point. The reason provided is quote,
Buyer did not recognize the transaction, so he filed it as fraud. Upon further
investigation and to vet the source, we also obtained official USPS
government documentation noting the delivery of the products
to our teams and billed as certified by the US government's
postal service. The money mismanagement didn't stop there. Katz handed down a command from legal
to halt all refunds to customers, and this was a knee jerk
reaction to the streaming mishap. So as people were canceling orders or backing out
because of what happened on Livestream, Artesian took a stance of no refunds, or at least as directed by Noah Katz
and whoever legal is. We're not lawyers here,
but blanket denying refunds as a knee jerk reaction does, in my opinion, seem
potentially fraudulent. As for why these potentially illegal
decisions were made, that's best explained by looking at the company's balance sheet
that we dug up at the time of demise. Artesian Builds had about $2.1 million
in assets, mostly inventory assets. So PC parts that would go on to build
that either have already been sold and are pending ship in or IPO
or will be sold in the future. This was contrasted starkly
by the liabilities section of the balance sheet listed at $4.1 million
and the final full operating month of that 4.1 million $853,000 was claimed
as a, quote, loan payable to family. And that would actually be
Katz's parents here. This later claims to an alleged $1.2
million, even just as the company went under. And given that Katz's parents are secured
creditors. The sudden increase in the loan
puts them in line to get repaid during the bankruptcy proceedings. Meanwhile, customers who bought on debit
or who didn't file chargebacks will be behind
the parents, in line, behind potentially former employees,
behind institutions and suppliers, basically behind
anybody who is filing a lawsuit. And the reason people who filed
chargebacks might get some money back is because you are now lumped in
with a secured creditor like a bank . If you look at footnote
seven on the balance sheet, you'll see a quarter million dollar
adjustment to the owners investment in the closing month of the books alongside another footnote
that says Increase the loan from insiders. So that'd be the parents. We don't want to get too derailed
by this part of the story. But just for some context, Katz's parents were deeply invested
in the company, both financially, but they also were involved
at some level in management, so they would communicate regularly
with other C-suite employees to see how people in that sort of position
and with the lower ranking employees in the company,
and they were involved in daily operations by sending lengthy messages
to and from employees and just us reading over the messages
in the logs, it became clear to us
that there was a culture problem within the company of general disrespect
between all parties. So this might fall largely on the CEO and the parental advisors. We can't be 100% sure of how
the blame is sort of shifted there. But regardless of where
that culture originated, ultimately we did see a lot of mutual disrespect
in the messages that were shared with us from a company Slack server
between basically staff on one side and CEO on the other. And that's just not conducive
to ever running a successful company. And for that reason we think it was
probably doomed long before the stream. Now we could keep going on about this
generally sort of scummy behavior in our opinions and about things like when the CEO and the company Slack
was shocked that anyone would curse him or artesian after it had insulted
people based on their follower account or when the crackdown on staff happened
after the streaming mishap. But you all get the point. All of this stuff we've been over so far,
it's bad. It's pretty damning. But this was all stuff that happened
more or less after or towards
the end of the collapse of the company. And so we still need to look at what
led up to it and cause that collapse. Other other than the person running it,
which at this point, given the behavior is probably enough. But there's more. And then we get into the power struggle between the East Coast and West Coast
branches of artesian built. The East Coast was run largely
autonomously. It had the operations team in it,
including the CEO and other people in operations and warehousing who could
largely run the show on their own. The West Coast was run directly
by the CEO who resided and worked there. And in terms of staff, our understanding
is that the Artesian Build split was about 2 to 1 staff on the West Coast
to the East Coast, meaning the West Coast had more staff
at any given time than the East Coast. Based on what we've been informed. So there were about 3 to 4 employees
building pieces on the East Coast and with these staff members for building, not counting
support, warehousing, logistics, people in the C-suite for operations
or marketing or whatever. Not counting any of those supporting
roles, only building pieces. The East Coast branch was capable
of building about 20 to 31 systems a day, depending on the complexity
of the systems being built that day. And that was with its four builders,
the West Coast, for comparison, from what we understand,
was built in about 3 to 4 a day, and yet it had significantly more staff and you start to see
some of the unraveling here. So our investigation revealed
that the company, as of its demise, had about 615 or so builds cued
for the East Coast, which is clear of all within a month if they had supply
available and didn't go bankrupt. And that's based on information
we've collected from former employees. And this warehouse was the one
that handled the bulk of the orders and had the most refined processes. There were an additional 170
to 180 builds queued at the West Coast warehouse located in Oakland. That's also where more of the streamer
and influencer builds were prepped. And here's where the problems start. This was revealed in our investigation. This image shows the company's to do list
for the West Coast warehouse
nearing sort of the end months of our. You can see that the West Coast
had about three builds per day scheduled, including one for a streamer
listed at the bottom. These were the types of builds that
Artesian CEO wanted to personally work on. And what we think
becomes a trend of attempts to associate with the concept of Internet celebrity. And these were what the West Coast handle. Now they also handle customer built so normal builds
that weren't supposed to be special ones. And the way it was supposed to be set up
is that the West Coast would handle builds
for people closer to California. And the East Coast was supposed to be
for handling builds on the East Coast because it drives down logistics costs
and people get stuff faster. That's the way it's supposed to work.
So then back to the image. This is what the West Coast had to do
on this particular Wednesday. And this is what the East Coast division had to do on its Wednesday
for the same date. It doesn't even fit on the page. So this branch, it printed money for
artesian by all accounts we could collect. The picture being painted here
is one of two autonomously operated arms of the same company with little collective
or collaborative action being taken between them in interviewing
team members from both locations. We got a strong sense of an East versus
West mentality within the same company, and as we spoke with the staff members
from the two branches, you could start
to see where some of the division arose. It can be healthy and useful or productive to have a somewhat competitive mindset
internally, but it has to be managed well by managers, by people higher
up to ensure that it doesn't devolve into just toxicity
and a backstabbing environment. That I am certain that some of our viewers
who've worked in corporate, large corporate environments especially probably are all too familiar
with where it goes from feeling like you're on a team to starting to feel
like you have to watch your back. For someone who wants
whatever your job, your window, cubicle, whatever,
it may be so easy for that to really go off the rails and create a much worse
situation that needs to exist. Now, as for why it devolved
into a competitive mindset, instead of turning it into a collaborative one, well,
this image explains that pretty well. This is the quality of build
we were told would get delivered between the warehouses. What you're looking at is the PC build
for Streamer and Nick Mercs shows how it was initially built
and shipped from the West Coast branch where the CEO directly worked on
these built the West Coast would build the celebrity builds often on stream and often done by the CEO
and maybe one other builder. And then the East Coast would beg
the West Coast branch to ship them the builds for a final once
over in this nick mercs build. That's exactly what happened. The East Coast branch handled the final
packing and distribution of the system, and when it arrived from the West Coast, the lower level East Coast
employees immediately set to work fixing the cabling mess
that was delivered for the system. It was going to be one of the. Largest collaborations with a streamer
they'd ever done, so they wanted it to look like
it was built well. Artesian CEO wasn't particularly fond
of Nick Mercs and the crew anyway, and we're also curious
if Nick Mercs knows that Cath referred to their paid partnership
as, quote, Ransom. As for why these decisions to rework
pieces happened in the first place, it's because of a difference in the escape rate
or the rate of army units or defects
that escape one warehouse versus another. We were told that the normal escape rate
for the West Coast was approaching 10%, meaning 10% of the product
leaving would have some form of defect and even need a replacement, a refund
or to be shipped back for repair. And the East Coast escape rate
was less than 1%, typically floating in the 0.3 2.5% range. So there's clearly an issue
with operations between the two branches. They clearly were not following
the same set of procedures. And this is what ultimately led to artisan
burning large amounts of money, really for no reason, because you have
two groups of people doing the same work. One is basically just going over the work
that the other one had already immediately completed. And that's where we think other than the other financial mismanagement
that we talked about earlier. A large portion of the money
was being spent in a way that isn't necessarily immediately
obvious, day to day. Until you zoom out. The biggest ongoing liability
though was builds awaiting a you. Artesian had many outstanding builds
either partially complete waiting to be even started
or just generally unfulfilled orders. Artesian would collect money
for the order as is normal and then fulfill it when complete. But it had unknown timelines sometimes
for years, and this could lead to short term liabilities stacking up as the orders
could be canceled at any time, even though the money had been taken
and potentially already recommitted to the business. Artesian would regularly send
its warehouse team to purchase GPUs at full retail price
or even scalped on stock acts just to get the land back ordered builds out the door
before the customer might cancel it. This reduced margin. But it was better than allowing the build
time and the build itself to go to waste. So Artesian ended up stuck
in a dangerous business cycle that a lot of businesses that go out of business
find themselves in, where it was perpetually trying
to chase the completion of old orders, which have been long paid for
and that money has probably been spent. So it doesn't feel like they're making
money anymore with selling new orders. So you're chasing old money with new. What's
starts to sound like something else. And the problem is what we got,
which is a collapse, but because our attention was constantly
chasing that new money instead of, first of all, filling those already paid
for orders due to limitations, it was reallocating and bound GB supply
all the time. This included it being reallocated away,
as we understand, from backlog to orders and instead into new promotions. Artisan's Leadership
What heads about allocation to builds versus allocations to acquiring new sales? They would also reallocate supply already
for streamer and celebrity build as the GPUs arrived,
rather than necessarily just selling them all
to fulfilling orders. So our teams and other managers
would push for the opposite. They would sometimes push
for fulfilling the orders instead of chasing new customer
acquisition. We have a lot more documentation and evidence
we could share of this fascinating story. But this piece is long enough
at this point, and at the end of all of this, you're
really left with just a few key points. One of those is that artesian
builds is now gone. It's been through bankruptcy proceedings, and the company
has reformed as a new entity, which is something like Artesian
Future Technologies. This is a normal bankruptcy procedure
where the assets reform into a single asset. And so artesian bills itself
as we know it is finished and all of its assets have been
or are being auctioned off at this point. And the company was run by a man
who we think was obsessed with becoming Internet famous
and with the idea of Internet celebrity. And he's achieved that. So kudos to him. But it was at the tragic loss of. A company that was a dream job
for a lot of its staff, and it was at the sacrifice
of a $20 million a year business in just
its first couple of years of operation. That's insane. And these sacrifices were made
at every opportunity to build the next twitch
celebrity gaming PC. From what we've observed, the company had a team of talented people
working for it on both coasts, particularly in the management
teams and operations who managed to keep things going in
spite of the completely misaligned goals. But at least in the company's
later months, there was a clear mutual disrespect between the CEO and his closest assigns
and the rest of the company, if not also between
the two coasts or branches. So this is not something
that can be overcome. Everybody in the company has to work
with each other in a respectful way. The company was imploding long
before the stream that you're seeing again now, and most of that implosion was fueled
by a constant pursuit of money without matching it to the same pursuit
of building and shipping a good product. This leaves customers screwed and internal staff
frustrated with what could have been. And with the cleanup work
they're having to do behind their own CEO or behind the entire branch
on the other coast. And that's not to speak of other
communication issues, like the changes that the CEO made overnight
or as close as the signs on the West Coast to the website, the promotions,
GPOs supply shifting within the company. This wasn't communicated with the company
as we understand it, until they woke up and saw it in the morning
until the customer service reps started getting emails from customers
and ambassadors asking what's going on? And they have to first
go to the CEO to ask because it hasn't
been communicated to them. This erratic and privileged behavior was fueled by a belief
that the money and the GPAs that artesian had oversold
would just keep coming in. By all accounts, we received this team
absolutely loved its local team mates between each branch and the jobs they had, with several
of them telling us it was a dream job. The financial and reputational damage,
though, was irreparable without replacing the CEO himself, and with that likely
a lot of the staff between both coasts. As for what's happening
now for the CEO of Artesian Builds and everyone left, well, some of the group
from the East Coast office has now split off to form their own
new company called Phenix Packs. And for Mr. Katz, he has changed
his name and is dealing with numerous lawsuits
from multiple different types of parties. And it's likely we haven't
heard the end of this story just yet. So our biggest concern out of all of this
at this point has been for the consumers who got shafted
and those who are left with absolutely no recourse,
especially if bought on debit. And if you couldn't
get into the chargebacks for institutions or for secured creditors. So the irresponsible behavior of artesian
billed as a company, not just the CEO, but also the CEO specifically,
have led to upwards of thousands of dollars of losses
for each person who had a computer on purchase,
who waiting for a computer. And again, there's even bills that were in there for remedies
and repairs that won't make it back. So it's tragic as a story. But again, we'll be back with some more
on this sometime in the future. So thanks for watching and support
this type of work. By going to store it,
I can access dot net. You can grab one of our new shirts
which are limited, or you can pick up something like a PC building tool kit,
a mouse mat, mod mat or other items. And you can also go to patriotic
homicides, gamers and access for behind the scenes videos
and to support our reporting. Thanks for watching
and we'll see you all next time.
The legend of discount starlord still continues.
But I sympathise with customers- not just those whose orders are not fulfilled/ delivered but those who returned their system for repair/ replacement/ service. It is going to be tough on those warehouse owners too since they couldn't put it back on rent anytime soon.
/u/PreussenEwige, why did you do this to the title?
Really good reporting, CEO is a scumbag
Amazing work by GN but man there are still so many unknowns. 20m revenue but only 2m in assets? Other than salary, infrastructure and the wasted money on shipping from one warehouse to another for QA, where did all the money go? Noah is such a scumbag, stealing from his own employees and contractors on top of probably doing the big E to his own company. Curious how much went into 'marketing' and 'branding' that ended up in his and his parents pockets.
He mentioned that the PCs people had sent in, with their personal information, are going to be auction off. I'm curious how that is legal. They can just sell off things that belong to other people with their personal data? That doesn't break any laws or anything?
So pretty much Noah's true personality started to show to the public due to that live stream which caused a spiral of everything to fall faster.
Likely what would have happened, if he wasn't found out, was he would have ran from the business on its last legs taking whatever money he had and leaving the country.
Gamers Nexus has a way better title. Also I don't see that this video is actually 4K.
Gamer Jesus delivered a great expose!
Bloody hell OP, that title is the worst