AI Or Just Indian Engineers Slogging It? London-Based Builder.ai Unmasked For Faking Its Intelligence
Builder.ai claimed to automate app building with AI, but it was 700 Indian engineers doing the real work behind the scenes.
Once praised as a rising AI unicorn, London-based startup Builder.ai now finds itself at the centre of a tech world reckoning. Marketed as a revolutionary no-code platform where artificial intelligence could build your dream app in record time, the company has come crashing down after revelations that its so-called AI was largely smoke and mirrors — powered not by algorithms, but by 700 engineers based in India.
The AI That Never Was
Builder.ai’s core pitch rested on its AI assistant, Natasha, which promised to simplify app development into something as easy as ordering pizza. The startup secured more than $450 million in funding, drawing heavyweights like Microsoft and the Qatar Investment Authority, and reached a valuation of $1.5 billion.
But insiders have now confirmed what critics long suspected: Natasha wasn’t building anything. Instead, it served as a fancy front-end interface collecting user inputs, which were then shipped to human coders in India who wrote the actual software manually.
“There was no real AI,” former employees stated. That assessment is backed by ex-executive Robert Holdheim, who sued the company for $5 million after being sacked for flagging what he described as deceptive practices. According to internal documentation, clients were told their apps were “80% built by AI” even though Natasha’s underlying tech “was barely functional.”
Revenue Games and a Leadership Shake-Up
The illusion didn’t stop with tech. In early 2025, Manpreet Ratia took over as CEO from founder Sachin Dev Duggal in what appeared to be a last-ditch move to salvage the company’s reputation. What he unearthed was damning.
Builder.ai had claimed $220 million in revenue for 2024. But an independent audit painted a bleaker picture: real earnings hovered around just $50 million. The discrepancy triggered financial fallout — Viola Credit seized $37 million from Builder.ai’s accounts, leaving the firm with a mere $5 million in restricted funds. Unable to pay employees or maintain services, the company began to unravel.
In a public statement posted on LinkedIn, Builder.ai acknowledged: “Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position.”
Fraud Allegations and the Bigger AI Lie
The scandal has now snowballed into something bigger than just overhyped marketing. Builder.ai is under investigation for potential financial fraud, including suspected round-tripping of revenue with Indian tech firm VerSe to falsely inflate growth figures and woo more investors.
The startup also reportedly owes massive dues to cloud providers — $85 million to Amazon and $30 million to Microsoft. A US federal probe is currently underway, with authorities combing through contracts and financial records.
With bankruptcy proceedings initiated in India, the UK, and the US, over 1,000 employees have been laid off and client projects lie abandoned.
As the dust settles, Builder.ai’s spectacular fall serves as a grim warning for startups selling AI hype without substance — and for investors who buy into the fantasy without asking who’s really writing the code.
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