Builder.AI, an AI unicorn in India which turned out to be scam, just went bankrupt. They fired every employee and went into insolvency. With significant investments from Apparently, Microsoft, SoftBank, and other tech titans had made significant investments in the business.
The business valued at $1.5 billion, raised almost half a billion dollars, and it was reportedly totally falsifying its “AI backend.”
In 2016, the Builder.ai was launched. Builder.ai claimed to revolutionize app creation by making it “as easy as ordering pizza.”
Microsoft, SoftBank, and the Qatar Investment Authority, with the help of such outstanding benefactors, the company was able to persuade investors out of almost half a billion dollars under the management of Sachin Dev Duggal, India’s AI poster boy. He later gave himself the crazy title of “Chief Wizard”.
It is claimed by many sources that Builder.ai’s acclaimed AI technology was really only a team of Indian developers manually developing code in the background.
According to Brobible reports:
“Multiple current and former employees reported that some pricing and scheduling calculations were done by traditional software, with most of the remaining work done manually by employees.”
In addition, it is said that investors were given a startling 300% increase in the company’s revenue numbers by Duggal. According to reports, an internal audit showed that the company’s real revenue was only $55 million, not the $220 million it had stated.
When creditor Viola Credit, which had given Builder.ai a $50 million loan in 2023, took $37 million from the company’s accounts last month, the end came quickly. The business could not even make payroll with just $5 million remaining (which was limited by government laws).
With a succinct LinkedIn post regretting “historic challenges and past decisions that placed significant strain on its financial position,” Builder.ai declared it was going into insolvency on May 21, 2025.
Adding to the company’s problems, court documents obtained by the Financial Times reveal that Saurabh Dhoot, another co-founder, is accused of loan fraud, and Duggal has been listed as a suspect in an Indian money laundering inquiry.
Manpreet Ratia, who was hired to “clean up” the problem, succeeded Duggal as CEO in February 2025, although Duggal kept his title as “Chief Wizard” until the very end.
One of the worst failures in the history of AI startups is the Builder.ai fiasco. It is a sobering reminder that not everything that sparkles in the AI investing gold rush is smart.
