Builder.ai, a London-based startup once valued at $1.5 billion and backed by tech giants like Microsoft and Qatar’s sovereign wealth fund, has filed for bankruptcy following revelations about deceptive practices. The company claimed to offer an AI-powered app development platform, but investigations disclosed that approximately 700 engineers based in India were behind its operations, impersonating artificial intelligence systems.
An internal investigation revealed that Builder.ai had significantly inflated its revenues, revising 2024 figures down from $220 million to $55 million, and 2023 revenues from $180 million to $45 million. The company also engaged in a “round-tripping” scheme with VerSe Innovation, the parent company of Dailyhunt, recording fictitious sales to inflate its financial performance.
Founder Sachin Dev Duggal stepped down as CEO but retained a board role. The company filed for Chapter 7 bankruptcy in Delaware, revealing debts to over 200 creditors and liabilities of up to $100 million against less than $10 million in assets. Unpaid bills included those to Israeli private intelligence agency Shibumi Strategy, US law firm Quinn Emanuel, and crisis PR firm Sitrick Group.
The collapse of Builder.ai underscores the importance of transparency and due diligence in the rapidly evolving AI industry. As the sector continues to grow, stakeholders must remain vigilant against companies that overstate their technological capabilities.
