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TEMASICK GOT INVEST IN THIS UNICORN?
$1.5 Billion AI Unicorn Collapse, All Indian Programmers Impersonating!
深潮 TechFlow
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The Indian guys are really quite impressive!
Today, we speak of the founder and former CEO of the AI programming company Builder.ai—Sachin Dev Duggal.
- He not only created a fake AI company that was 'all humans, no intelligence.'
- He managed to secure hundreds of millions in funding from giants like SoftBank and Microsoft, with a valuation reaching $1.5 billion.
- Moreover, he dared to falsely report 300% revenue to investors.
More explosively, this scam persisted for eight years.
But this week, he has completely played out.
Founder and former CEO Sachin Dev Duggal
With the recent exposure of 'fraud,' the previous round of investors hurriedly froze the remaining $37 million in their investment accounts (out of a total investment of $50 million), leaving only $5 million in the company’s account, which was also restricted by government regulations on capital outflow and could not be used to pay salaries.
There was no choice; Builder.ai could only file for bankruptcy, and at that time, the CEO had already been replaced by Manpreet Ratia, who was brought in to 'clean up.' Founder Sachin Dev Duggal resigned as CEO in February, with Ratia taking over.
This farce directly led to the largest collapse in AI startups since the release of ChatGPT in 2022—this company was valued at over $1.5 billion in its last funding round.
Builder.ai's bankruptcy liquidation notice
Builder.ai's website is now inaccessible, leaving only two contact email addresses.
And the 'sucker' in this storm, besides Viola Credit, which provided $50 million, is also one of the world's largest sovereign wealth funds, the Qatar Investment Authority (QIA), which led a $250 million funding round two years ago.
And in the same year, Microsoft also invested and became a strategic partner. They even integrated Builder.ai into their cloud services.
Golden Age
Builder.ai was born in London, stemming from its founder Sachin Dev Duggal's dissatisfaction with traditional software development.
In the golden age of AI-driven narratives, Builder.ai has a promotional slogan that is too good to ignore: making software development 'as easy as ordering a pizza.'
This startup, established in 2016, claims it can enable non-engineers to build complex applications through a platform that is supposedly powered by AI, thus popularizing software development.
The promotional slogan for AI has been very effective for investors.
Builder.ai was formerly known as Engineer.ai, and the company raised $29.5 million in funding in 2018 from investors including Deepcore Inc., a wholly-owned subsidiary of SoftBank.
Other investors include the Zurich-based venture capital firm Lakestar (an early investor in Facebook Inc. and Airbnb Inc.) and Singapore-based Jungle Ventures.
Founder Sachin Dev Duggal at an early tech conference
By 2022, Builder.ai had raised $195 million and in May 2023, added another $250 million in a financing round led by the Qatar Investment Authority (QIA).
In the same year, Microsoft joined as a strategic investor and partner, integrating its Builder.ai platform into its cloud service products.
This brought immense recognition, and with it, equally enormous expectations.
In the following eight years, it raised over $445 million in funding, with investors including Microsoft and the Qatar Investment Authority, and the company's valuation crossed the $1.3 billion mark.
The solution offered by Builder.ai is to combine modular code components with human developers, coordinated by AI.
Its platform, named 'Builder Studio,' featured a digital assistant called 'Natasha,' promising an AI-driven seamless user experience.
Builder.ai's flashy website is now completely inaccessible.
But the reality behind this vision is that most of the work was done by Indian developers, not AI.
In 2019, The Wall Street Journal revealed an embarrassing truth: Builder.ai's AI is more of a marketing gimmick than an engineering breakthrough.
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.
If you tell customers you are using AI, they are unlikely to think of technology from the 1950s. Decision trees are a very old and simple technology.
These individuals stated that the company lacks natural language processing technology and that the decision trees used internally should not be considered AI.
As reported, Builder.ai, this AI company, is 'all humans, no intelligence.'
The gap between this narrative and reality will determine the company's trajectory.
Only humans, no intelligence.
The signs of deception from Builder.ai were not only evident in the 2019 Wall Street Journal report.
According to multiple former employees and insiders on Reddit, Builder.ai may have only had humans, not intelligence, from the start.
Multiple former employees stated that the management could not have been unaware of the ongoing fraud; they simply chose to ignore it. After working at the company for two years, they hardly saw any projects delivered.
Moreover, former employees disclosed that Builder.ai drastically underpaid employees, even calling the salaries 'terrible,' and that it was not an AI-oriented but a marketing-oriented company.
A user discovered many 'incomprehensible' aspects in the services provided by Builder.ai a year ago.
Including: extremely poor development experience, lack of modules, unusable code, inaccessible IDE, and some code that was completely unmodifiable.
Insiders directly revealed that Builder.ai was essentially a company that used the 'AI domain name' to commit fraud. The company hired a large number of low-cost developers to 'pretend to be AI.'
Moment of liquidation
Over time, the rifts within Builder.ai have been expanding.
According to insiders, the company has long relied on inflated revenue forecasts and AI-related marketing to secure funding.
A massive global workforce and expensive expansion plans, including exploring new markets in Southeast Asia and the Middle East, have led to increasing capital burn rates.
Meanwhile, legal issues for the former CEO have also been numerous.
According to the Financial Times, Duggal is involved in an investigation into a money laundering criminal case in India. In response, Builder.ai's general counsel previously stated in a now-deleted blog that Duggal was merely a witness in the case.
However, Duggal resigned as CEO in February but remained on the board and kept his 'wizard' title.
He was succeeded by Manpreet Ratia, a former executive at Amazon and Flipkart, who had previously served as managing partner at Builder.ai's investor Jungle Ventures.
Next came the moment of liquidation.
In May 2025, one of Builder.ai's senior investors, Viola Credit, seized $37 million from the company's account, triggering a default.
Just two months ago, the CEO Manpreet Ratia, who took over to clean up the mess, had only $5 million left in cash.
A few days later, he filed for bankruptcy.
It turned out that Builder.ai provided exaggerated financial forecasts to lenders, misreporting its revenue health.
This breach of contract allowed Viola Credit to take decisive action.
But the larger reason behind this structural collapse is that their business model never matched their brand promotion.
Ratia admitted in a company-wide conference call that the defeat was certain. Most global employees were laid off, and the product that had been positioned as an AI innovation flagship was also shelved.
On May 20, it officially declared bankruptcy.
A month before the failure, the company undertook a last-minute restructuring, laying off 220 out of 770 employees.
Builder.ai stated this week that due to 'inability to recover from historical challenges and past decisions that have put immense pressure on the company's finances,' despite the management's 'unrelenting efforts,' the company will appoint an executive to oversee the bankruptcy process.
According to the Financial Times, Builder.ai owes Amazon a total of $85 million and Microsoft $30 million.
Startup Star
Why was Duggal able to win over investors in the beginning? Whether it was Qatar funds, SoftBank, or Microsoft, they are not easily deceived.
This inevitably brings up Duggal's 'impressive' resume.
Sachin Dev Duggal began his career by assembling PCs at the age of 14, and by 17, he had created one of the world's first automated currency arbitrage trading systems for Deutsche Bank.
At 21, while still attending Imperial College, he launched his next startup project—cloud computing company Nivio.
After leaving the $100 million valued Nivio, Duggal began focusing on developing a photo-sharing app called Shoto.
However, he found it difficult to find front-end developers who met his needs. Duggal couldn't help but think: if even he had trouble finding reliable helpers, how would someone without an engineering background start building an application?
Thus, he founded Builder.ai to make software building 'as easy as ordering a pizza.'
The rest of the story is already known to everyone.
AI washing
In the industry, Builder.ai's model of packaging traditional tech services as AI to secure funding is known as 'AI washing.'
Its failure has reignited discussions about the necessity of conducting technical due diligence in AI transactions.
For customers, many of whom are startups and small to medium enterprises, this sudden shutdown left them scrambling to rebuild or migrate their applications. This highlighted the risks of relying on emerging players to provide critical software infrastructure.
Despite this setback, the broader low-code/no-code market remains resilient.
Gartner predicts that by 2028, 60% of new enterprise applications will be developed using such platforms. The global market size is expected to reach $26 billion by the end of this year.
From Gartner's accolades to Fast Company's rankings, from star investors to the top company logos displayed on its website, Builder.ai seemed to be one of the great success stories of the AI era.
But like many companies built on hype, it conflated scale with sustainability, as well as visibility with viability.
Ultimately, Builder.ai's story is less about a failed technology and more about the consequences of pretending it once worked.
In the wave of investment driven by ChatGPT, scale, valuation, and visibility do not equate to a moat.
The story of Builder.ai is reminiscent of the former Theranos—when the gap between technological promise and actual capability appears even a millimeter, the capital market will tear open a chasm of a kilometer in the next second.
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