Builder.ai, a UK-based Artificial Intelligence company backed by Microsoft, which once had a net worth of $1.5 billion, has filed for bankruptcy, following revelations that behind its ‘artificial neural network’ was a workforce of around 700 engineers operating from India.
The company had marketed its AI-powered app development tool, ‘Natasha’, as a revolutionary system capable of autonomously designing and coding software at high speed.
However, successive investigations exposed that the majority of the development work was performed by human engineers in India, rather than by Artificial Intelligence (AI).
Bloomberg also uncovered questionable financial dealings between Builder.ai and Indian social media firm VerSe, including allegedly inflated invoices exchanged between 2021 and 2024 to artificially enhance revenue figures. VerSe has denied any wrongdoing, calling the allegations “baseless and false.”
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The eight-year-long practice of misrepresenting human-powered work as AI-driven came to light in May 2025, leading to a swift downfall of the company.
In a statement posted on LinkedIn, Builder.ai confirmed it was entering insolvency proceedings, citing “historic challenges and past decisions” as reasons for its financial collapse.
The scandal has intensified calls for greater transparency in the AI sector, as investor enthusiasm continues to fuel rapid growth and billion-dollar valuations in emerging tech companies.
