Once valued at $1.5 billion, Builder.ai has collapsed after it was revealed that the company had been faking its use of artificial intelligence. Despite claiming to offer AI-powered software solutions, the company had, for years, relied on human developers in India to manually write code.
Over an 8-year period, Builder.ai raised more than $445 million from investors, including tech giants like Microsoft and the Qatar Investment Authority. However, most of the services presented as AI-driven were actually the result of human labor.
Founder Sachin Dev Duggal stepped down in February 2025 after being accused of inflating the company’s revenue by 300%. He is now under investigation in India for alleged money laundering.
In May 2025, one of the company’s lenders seized $37 million from its accounts. Only $5 million remained, but it was frozen due to regulatory restrictions. Unable to meet its financial obligations, Builder.ai filed for insolvency.
This case highlights how some companies exaggerate their AI capabilities to attract funding, emphasizing the need for investors to exercise greater caution and due diligence when evaluating AI-related claims.
