Indian AI unicorn, Builder.AI, has just spectacularly collapsed, laying off all of its employees and entering insolvency proceedings. The startup, which was worth $1.5 billion and raised over half a billion, with major investments from Microsoft, SoftBank, and other tech giants, was apparently completely faking its “AI backend.”
Founded in 2016, Builder.ai promised to revolutionize app development, making it “as easy as ordering pizza.” The company, led by India’s AI poster boy Sachin Dev Duggal (who later awarded himself the whimsical title “Chief Wizard”), managed to charm investors out of nearly half a billion dollars, including heavyweight backers Microsoft, SoftBank, and the Qatar Investment Authority.
According to multiple reports, Builder.ai’s vaunted AI technology was actually just a group of human developers in India manually writing code behind the scenes. As Brobible reports, “multiple current and former employees reported that some pricing and scheduling calculations were done by traditional software, with most of the remaining work done manually by employees.”
The end came swiftly this month when creditor Viola Credit, which had lent Builder.ai $50 million in 2023, seized $37 million from the company’s accounts. With only $5 million left (which was restricted by government regulations), the company couldn’t even meet payroll.
