A Dreamlike Beginning…
Builder.ai (formerly known as Engineer.ai) was founded in 2016 by Indian entrepreneur Sachin Dev Duggal. The company positioned itself as a platform that could automatically create mobile applications using artificial intelligence (AI). Its slogan was simple yet appealing:
“Building an app should be as easy as ordering a pizza!”
This approach immediately caught the attention of investors.
Rise: The AI Revolution That Amazed Investors
Starting from 2019, the company introduced a system called “Natasha,” which aimed to automate code writing, design, and app development through AI. This generated considerable buzz in the startup world.
2023: A Surge of Major Investments
In 2023, Builder.ai raised $230 million in funding. The investors included:
- Microsoft – with plans to integrate Builder.ai into its Azure ecosystem;
- Qatar Investment Authority (QIA) – the sovereign wealth fund of Qatar;
- Insight Partners – a global venture capital powerhouse.
This funding round elevated the company to unicorn status, with its valuation surpassing $1 billion.
The Problem: Humans Instead of AI?
2019: The Truth Uncovered by The Wall Street Journal
Despite the company’s claims of AI-driven app development, a 2019 report by The Wall Street Journal revealed that most of the coding was actually being done manually by engineers in India. In other words, AI was largely a marketing slogan, while the real work was being carried out by people.
Nevertheless, the company continued promoting the AI narrative. This situation became a prime example of “AI washing” — a trend where companies falsely claim to use artificial intelligence where none actually exists.
Collapse: The Illusion of AI Comes Crashing Down
Financial Manipulation
In 2025, Bloomberg and other publications accused Builder.ai of engaging in a practice known as “round-tripping” — a scheme in which a company sells a service and then buys it back at the same price, thereby artificially inflating revenue figures.
In addition:
- The company claimed $180 million in revenue for 2023;
- However, an independent audit in 2025 determined that the actual figure was around $45–55 million.
Were Investors Misled?
This revelation delivered a painful truth — not only for investors but for the entire AI ecosystem:
It wasn’t the technology that attracted investment, but the narrative and marketable language around it.
Management Changes and Bankruptcy
- February 2025: Founder Sachin Dev Duggal stepped down from his role as CEO (though retained the honorary title “chief wizard”);
- Manpreet Ratia was appointed as the new CEO and initiated internal audits;
- In May 2025, the company officially entered bankruptcy proceedings.
Key Consequences:
- Nearly 1,000 employees were laid off (approximately 80% of the workforce);
- Creditors seized over $50 million in company funds;
- The company ceased operations in all of its markets (UK, US, India, Singapore);
Major investors, including Microsoft and QIA, suffered significant losses.
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