Builder Ai, which is based in London, has been valued at about $ 1.5 billion, backed by Microsoft and a sovereign wealth fund, declared bankruptcy after being exposed that what was promoted to him as a platform to develop applications with artificial intelligence was only a manual work implemented by engineers in India.
According to reports, about 700 Indian engineers participated in the development of applications, pretending to be part of an artificial intelligence system.
The emerging company has succeeded in raising more than $ 445 million of investments by marketing its platform as it is dependent on artificial intelligence in building applications.
– Diaspora marketing of artificial intelligence technologies: The company promoted its platform as using artificial intelligence to develop applications quickly, through a digital assistant called “Natasha”, but reports revealed that most of the programming operations were carried out manually by Indian technical engineers, while the company falsely claimed that these operations are carried out through artificial intelligence.
The collapse of Builder.ai: The features of the collapse began in May 2025, when the “Viola Credit” financing company freezed $ 37 million from the company’s assets, after discovering an amplification of the announced revenues of 2024 by 300%. The founder, Sashin Dave Dougal, claimed that the company had made sales of $ 220 million, while the audit showed that the real number does not exceed 50 million dollars.
– “Engineers without artificial intelligence”: Doubts about Builder.ai’s allegations regarding the use of artificial intelligence dating back to 2019, when the Wall Street Journal published a report that revealed that the platform is actually relies on human engineers, and not on advanced artificial intelligence techniques.
Former employees described the company as “fully made up of engineers, without artificial intelligence.”
The trick was completely exposed when Manbert Ratia took over the position of CEO in February, succeeding Dugal, where he discovered the extent of the financial manipulation that took place.
As a result, the US Public Prosecution began an official investigation and requested to reach the company’s records and customers’ data.
The largest collapse of an emerging company in the field of artificial intelligence: is a collapse
Builder.ai is the largest fall for a start -up company in the field of artificial intelligence since the launch of the wave of investments led by the emergence of ChatGPT.
The company is currently facing huge debts, of which $ 85 million for Amazon, and $ 30 million for Microsoft for cloud computing services. About 1,000 employees lost their jobs as a result of the collapse.
– “AI packaging” in the era of the boom: This event sparked a renewed wave of anxiety about the phenomenon of “artificial intelligence packaging”, a common practice in which companies rename traditional services as supported by artificial intelligence, with the aim of attracting financing amid the current technical boom.
– The credibility of startups in artificial intelligence: This event directs a warning bell to different parties when dealing with foreign companies that claim their specialization in artificial intelligence techniques, without providing clear evidence of the existence of real governance, the rule of data, or real qualifications for the artificial intelligence engineers working for it.
