An AI company that marketed itself as a technological pioneer – and attracted investments from Microsoft, among others – has gone bankrupt. In the aftermath, it has been revealed that the technology was largely based on human labor, despite promises of advanced artificial intelligence.
Builder.ai, a British startup formerly known as Engineer.ai, claimed that their AI assistant Natasha could build apps as easily as ordering pizza. But as early as 2019, the Wall Street Journal revealed that much of the coding was actually done manually by a total of about 700 programmers in India.
Despite the allegations, Builder.ai secured over $450 million in funding from investors such as Microsoft, Qatar Investment Authority, IFC, and SoftBank’s DeepCore. At its peak, the company was valued at $1.5 billion.
In May 2025, founder and CEO Sachin Dev Duggal stepped down from his position, and when the new management took over, it emerged that the revelations made in 2019 were only the tip of the iceberg. For example, the company had reported revenues of $220 million in 2024, while the actual figures were $55 million. Furthermore, the company is suspected of inflating the figures through circular transactions and fake sales via “third-party resellers”, reports the Financial Times.
Following the new revelations, lenders froze the company’s account, forcing Builder.ai into bankruptcy. The company is now accused of so-called AI washing, which means that a company exaggerates or falsely claims that its products or services are powered by advanced artificial intelligence in order to attract investors and customers.
The company’s heavy promotion of “Natasha” as a revolutionary AI solution turned out to be a facade – behind the deceptive marketing ploy lay traditional, human-driven work and financial irregularities.