- Builder.ai collapsed into insolvency after it was revealed that 700 human engineers actually ran its “AI” platform in India.
- The company faces allegations of inflating sales via “round-tripping” with VerSe Innovation, which both firms deny.
- Builder.ai’s downfall underscores the risks of AI hype and opaque business practices in the tech sector.
Builder.ai, a London startup once hailed as a leader in no-code AI development and backed by Microsoft, has entered formal insolvency after it was revealed that its much-touted AI platform relied on 700 human engineers in India, not artificial intelligence.
The company’s AI assistant “Natasha,” marketed as capable of building software from simple prompts, was reportedly just a front for manual coding by engineers, who even posed as the AI on client calls.
The unravelling began when lender Viola Credit seized $37 million from Builder.ai’s accounts after the company defaulted on a $50 million loan, leaving it unable to pay employees or continue operations.
The company has now entered court-supervised insolvency proceedings in the UK, with administrators seeking to recover assets and salvage what remains.
Compounding the crisis are allegations of “round-tripping”—Builder.ai and Indian unicorn VerSe Innovation allegedly exchanged invoices for similar amounts between 2021 and 2024, inflating sales figures without actual services rendered.
Both companies deny wrongdoing, with VerSe co-founder Umang Bedi calling the claims “baseless and false”.
Builder.ai’s collapse is a cautionary tale for the AI sector, highlighting how hype and opaque business practices can mask fundamental weaknesses.
The company raised over $450 million from top investors, but its reliance on human labour and questionable accounting ultimately led to its downfall.
Edited by Annette George
