Overview
- Builder.ai filed for bankruptcy in May after lender Viola Credit seized $37 million over inflated 2024 revenue projections.
- Its “Natasha” AI assistant was actually powered by roughly 700 software engineers in India rather than automated algorithms.
- A February audit led by new CEO Manpreet Ratia uncovered actual revenue of $50 million, far below the $220 million in sales founder Sachin Dev Duggal had promised.
- The company now owes $85 million to Amazon and $30 million to Microsoft in unpaid cloud computing fees.
- The scandal represents the largest AI startup failure since ChatGPT’s launch and underscores growing investor wariness of unverified AI claims.