The Collapse of Builder.ai: When a "Neural Network" Turned Out to Be an Army of Indian Programmers

The Collapse of Builder.ai: When a "Neural Network" Turned Out to Be an Army of Indian Programmers

The British artificial intelligence startup Builder.ai has filed for bankruptcy, reports Bloomberg.
The reason was the confiscation of most of its funds by a major creditor, explained CEO Manpreet Ratia.

Previously, he had laid off most of the staff, as the company no longer had the means to pay them.
Builder.ai has $5 million left in its Indian accounts, but these funds cannot be withdrawn due to legal restrictions.

The Collapse of Builder.ai: When a "Neural Network" Turned Out to Be an Army of Indian Programmers

What Was Natasha?

Builder.ai offered services from a neural network named Natasha, which supposedly helped users develop mobile applications based on existing templates.

Founder Sachin Dev Duggal, who previously called his project Engineer.ai, boasted: "We created software and an AI called Natasha that allows anyone to create their own app, like one for ordering pizza."

However, in 2019, The Wall Street Journal revealed a shocking truth: instead of a neural network, hundreds of human programmers from India and other countries were manually coding the applications.

The development of actual AI technology had only just begun, yet the company continued to promote its product as a high-tech solution.

How Did They Attract Investments?

Despite the scandal, Builder.ai's management managed to maintain investor confidence.

After rebranding the company and capitalizing on the ChatGPT hype, they secured significant funding from major players, including the sovereign wealth fund Qatar Investment Authority (QIA) and Microsoft.

The total investment reached $250 million.

However, this year, the company’s situation deteriorated sharply.

Auditors discovered serious issues: risks were underestimated, and sales figures were systematically inflated.
As a result, founder Sachin Dev Duggal stepped down as CEO, replaced by Manpreet Ratia, who soon announced bankruptcy.
Consequences of the Collapse

According to Ratia, bankruptcy petitions have been filed in all five jurisdictions where the company operated.
This case highlights how attempts to pass off human labor as technology can lead to catastrophic outcomes.
The Builder.ai saga also underscores the importance of transparency in the tech industry.

In an era when artificial intelligence is becoming a key trend, companies must be honest with clients and investors to avoid similar failures.
FX24

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