This $1.5 billion AI Unicorn Just Collapsed

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The Rise and Fall of Builder.ai: When AI Hype Met Human Hands—and a $445 Million Mirage

Imagine a world where building software is as easy as ordering a pizza. That’s the dream Builder.ai sold—an AI-driven platform promising to democratize app development for anyone, anywhere. For eight years, this vision captivated investors, drawing in over $445 million from heavyweights like Microsoft and the Qatar Investment Authority. But beneath the glossy branding and slick demos, there was a less glamorous truth: most of the “AI” was just code written by human developers in India, hidden behind a curtain of marketing wizardry.

Let’s rewind. Builder.ai, founded in London in 2016 by Sachin Dev Duggal, burst onto the scene with a pitch that seemed almost too good to be true: modular code libraries stitched together by artificial intelligence, guided by a digital assistant named Natasha. The company’s platform, Builder Studio, was positioned as a game-changer, letting non-engineers build complex apps with ease. Investors lapped it up. The startup’s valuation soared past $1.3 billion, and by 2023, Microsoft was integrating Builder.ai into its cloud offerings—a stamp of approval that seemed to validate the hype.

But inside the company, things weren’t so magical. As early as 2019, The Wall Street Journal reported that Builder.ai’s AI was more marketing than machine. The real work was being done by developers in India, not by sophisticated algorithms. The company’s AI layer, it turned out, was little more than outdated decision trees—a far cry from the advanced, generative AI that had been promised24. Despite this, the narrative held strong, fueled by inflated revenue projections and ambitious expansion plans. Builder.ai opened offices across Southeast Asia and the Middle East, burning through cash at an alarming rate.

Then came the cracks. In early 2024, the Financial Times revealed that both Duggal and a co-founder, Saurabh Dhoot, were under investigation in India for past business dealings—Duggal for alleged money laundering, Dhoot for bank fraud. While these cases predated Builder.ai, the news cast a long shadow over the company’s leadership and credibility. Duggal, known as the “Chief Wizard,” was praised for his vision but criticized internally for a high-pressure culture and questionable governance. The company cycled through auditors and lacked a permanent CFO during a critical growth phase, leaving financial controls weak and revenue reporting murky.

By February 2025, the pressure was too much. Duggal stepped down as CEO, replaced by Manpreet Ratia, a seasoned executive brought in to clean up the mess. Ratia slashed costs, commissioned audits, and tried to restate revenues—but the damage was done. The company had overstated its revenue by as much as 300%, according to reports, and provided lenders with misleading financial projections. In May 2025, the dominoes fell: Viola Credit, a major lender, seized $37 million from Builder.ai’s accounts, leaving just $5 million—frozen by regulations. With no way to pay its bills, Builder.ai filed for insolvency, letting go of most of its global staff and shelving its once-celebrated product.

So, what went wrong? At its core, Builder.ai was a story of ambition outpacing reality. The company’s business model never matched its branding. While it raised hundreds of millions and attracted blue-chip investors, its “AI” was largely a facade—a cleverly marketed assembly line of human coders, not the revolutionary technology investors thought they were buying into. The scandal has sparked calls for greater scrutiny of “AI washing,” where traditional software services are rebranded as AI to attract investment and market approval.

For investors, the lesson is clear: look beyond the hype. The Builder.ai saga is a cautionary tale of what happens when promises overshadow performance, and when the line between innovation and illusion blurs. It’s also a reminder that, in the end, the truth always comes out—sometimes at the cost of hundreds of millions of dollars, and the trust of those who believed in the dream.

The Human Angle: Why We Fell for the Story

Why did so many smart people—including Microsoft—buy into the Builder.ai narrative? The answer lies in the power of storytelling. We all want to believe in the underdog, the visionary, the company that will change the world. Builder.ai’s pitch tapped into that desire, promising a future where anyone could build software, powered by the magic of AI. It was a story that resonated, especially in a world hungry for tech unicorns and quick wins.

But stories, no matter how compelling, need to be grounded in reality. Builder.ai’s collapse is a wake-up call for investors, entrepreneurs, and tech enthusiasts alike: always ask for proof, demand transparency, and remember that even the most dazzling wizards can be hiding something behind the curtain.

As for Sachin Dev Duggal, his journey isn’t over. He remains under investigation in India, his legacy now intertwined with allegations of money laundering and financial misrepresentation. The Builder.ai story, meanwhile, will be remembered as a cautionary tale—a reminder that, in the world of startups, sometimes the most powerful technology is the story itself.