Builder.ai inflated financials and overstated 2024 sales by 300%, according to Bloomberg|builder.ai|Instagram
London-based Builder.ai, once valued at $1.5 billion, filed for Chapter 7 bankruptcy in the US after creditors seized most of its funds. It marks the biggest AI startup failure since ChatGPT kickstarted the artificial intelligence investment boom.
Backed by Microsoft, Insight Partners, and Qatar’s sovereign wealth fund, Builder.ai’s downfall highlights the risks of frenzied investment in unproven AI ventures. It had raised $450 million at one point.
The startup claimed its AI assistant could build apps autonomously despite relying on human engineers to do the work.
What happened?
Builder.ai inflated financials and overstated 2024 sales by 300%, according to Bloomberg. It forecasted $220 million in revenue for that year but actually brought in ~$50 million.
The company allegedly faked business with India’s VerSe Innovation to pad its revenue; VerSe denies any involvement.
Builder.ai founder Sachin Dev Duggal stepped down earlier this year, retaining only a symbolic role as investors scrambled to audit the books.