Kathmandu. Builder.ai, a startup once hailed for revolutionizing app development through artificial intelligence (AI), has collapsed into insolvency — not because of technology failure, but because the company allegedly never used AI as claimed. Despite raising over $500 million from top investors like Microsoft, SoftBank, and the Qatar Investment Authority (QIA), it was recently revealed that the company relied on human developers manually writing code, not intelligent automation.
AI in Name, Manual Labor in Practice
Builder.ai’s pitch revolved around an AI assistant called “Natasha,” which it claimed could build apps automatically using cutting-edge AI. But investigations revealed the opposite — behind the scenes, teams of Indian engineers were doing manual coding work, and AI was used minimally, if at all. The 2019 Wall Street Journal report that hinted at this issue only gained renewed attention after recent financial irregularities came to light.
Exaggerated Revenue & Financial Crisis
In 2024, Builder.ai claimed revenues of $220 million, but internal audits revealed the actual figure was closer to $55 million. Similarly, 2023 revenues were reportedly exaggerated from $180 million to $45 million. These inflated claims and poor financial governance led a primary lender to seize $37 million, triggering the company’s move into insolvency proceedings.
Leadership Shake-Up & Global Shutdown
Founder Sachin Dev Duggal resigned from the CEO role in early 2025, handing over leadership to Manpreet Ratia. However, efforts to stabilize the company failed, and a large portion of staff was laid off. Builder.ai has since filed for insolvency in the UK, US, UAE, Singapore, and India.
Trust Shattered for Major Backers
Builder.ai secured hundreds of millions of dollars by promising AI-driven, no-code app development. But with minimal AI involvement and a model reliant on outsourced labor, the platform misrepresented its core value to investors. This revelation has left major backers reeling, questioning the lack of transparency and accountability in hyped tech startups.
Lesson Learned
Builder.ai’s downfall serves as a cautionary tale about AI hype and inflated promises. The gap between what startups claim and what they actually deliver is widening — and without due diligence, investors risk betting on nothing more than smoke and mirrors.
