LONDON: Builder.ai, a London-based tech company once valued at $1.5 billion, has filed for bankruptcy after its so-called AI-driven app builder was revealed to be powered by over 700 human engineers in India.
The company had claimed that its AI tool, ‘Natasha’, could autonomously create and code applications faster than traditional methods. Microsoft had reportedly invested $455 million in support of this vision. However, recent investigations showed the core development work was largely manual.
According to Bloomberg, most of the app building and coding was done by Indian engineers, while only clerical tasks used basic software. This revelation shocked the tech world and raised questions about Builder.ai’s credibility.
The controversy deepened when the company was linked to questionable financial practices involving VerSe, an Indian social media startup. Reports alleged that both firms exchanged inflated invoices between 2021 and 2024 to artificially boost financial figures. VerSe has denied the accusations.
In a public statement on LinkedIn, Builder.ai confirmed it was entering insolvency proceedings. The company blamed historic decisions and long-standing issues for its downfall, saying its current team had explored all possible options but could not recover the business.
This collapse has sparked serious concerns about transparency and accountability in the artificial intelligence industry. As funding for AI projects grows rapidly, experts now urge investors to scrutinize claims more carefully to avoid being misled by hype.