Builder.Ai- The Billion Dollar Startup That Faked AI
Everyone is trying to compete in the “AI Startup Race” but what if you just make humans disguised as AI chatbots. This company made us dream about the no-code revolution. They felt more trustworthy because they were Backed by Microsoft and Qatar’s sovereign fund, Builder.ai raised more than $500 million in funding. why wont they get funding, they are creating a startup which is claiming to generate software using artificial intelligence faster and cheaper than traditional developers but recently some internal audits and Whistleblower’s report exposed their financial and AI fraud. Full story Explained
Background of the Startup and Revenue Model
This startup was launched in 2016 by Sachin Dev Duggal, at that time it was known as engineer.ai, The idea with which they started the brand was that they were creating a platform that would bring a revolution in the coding industry by creating fully functional Mobile apps without the hassle of writing code manually using AI. it was indeed a Exceptional idea and had the potential. The spotlight of the brand was their Ai assistant
“Natasha” who was marketed as an AI assistant that would help you in the building process. Natasha was supposed to understand your requirements and automatically create software using prebuilt components and machine learning.
Now this exceptional idea did not only attract the users but also investors like Microsoft, who gave them a funding back in 2023.
The AI Fraud
Now till 2024 the company was doing fine though there were suspicions that somthing is wrong with the AI like Mid to Late 2024 – Growing Internal Suspicion
- “Natasha,” the AI assistant, seemed to give overly manual responses—or at times, oddly human ones
- Employees and some customers began noticing inconsistencies in the AI’s performance.
until early 2025 when some internal former employees reported that the company was using cheap human labor as AI. These humans were manually assembling app features while customers were told it was happening via AI.
80.lv and other tech outlets broke the story:
“Builder.ai’s ‘AI’ companion Natasha was actually Indian workers manually completing app-building tasks.”
The Financial Fraud
- These revelations came just as Builder.ai was being audited by Viola Credit (which had lent it $50M).
- Viola Credit and later third-party investigators found evidence of round-tripping—a form of accounting fraud where two companies create fake sales by invoicing each other without real business transactions.
- For example, Builder.ai would bill VerSe for “services,” and VerSe would bill them back for something else—artificially inflating both sides’ revenues to look more profitable.
- Although Viola Credit was primarily investigating financial misconduct, the AI fraud added to the collapse in trust.
- Now as of june 2025, Builder.ai is under investigation for inflating revenues through fake AI claims and round-tripping deals, leading to insolvency and legal action across the US, UK, and India.
