AI Firm Declares Bankruptcy Following Revelation of 700 Indian Engineers Behind Operations

A London-based AI company, Builder.ai, has filed for bankruptcy, revealing that its much-touted ‘neural network’ was actually a team of over 700 engineers in India. This revelation has sent shockwaves through the tech community, particularly given the company's $1.5 billion valuation, bolstered by a substantial $455 million investment from Microsoft.

Builder.ai's flagship product, an app-building service named ‘Natasha,’ claimed to harness artificial intelligence for rapid application development. The service promised to streamline everything from design to coding, positioning itself as a leader in the burgeoning AI market.

However, investigations have uncovered that the majority of the work was performed by human engineers rather than sophisticated AI systems. Reports indicate that while some clerical tasks were automated, the core operations relied heavily on manual labor.

The facade lasted for eight years before being exposed in May 2025, leading to Builder.ai's announcement of insolvency shortly thereafter. In a statement on LinkedIn, the company cited “historic challenges and past decisions” that severely impacted its financial health.

“Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover,” the statement read, highlighting the struggles faced by the firm.

Further scrutiny revealed that Builder.ai had engaged in questionable practices with VerSe, an Indian social media startup, inflating sales figures through mutual billing arrangements from 2021 to 2024. Documents reviewed by Bloomberg suggest that these transactions did not correspond to actual services rendered.

VerSe has strongly denied these allegations, with co-founder Umang Bedi asserting that the company does not engage in revenue inflation. “We’re not the kind of company that is in the business of inflating revenues,” he stated, labeling the claims as “baseless and false.”