&w=3840&q=100)
Behind bankruptcy plea of London start-up: It hired 700 Indian engineers to pose as AI tools
A major AI scandal has shaken the tech world as Builder.ai, once valued at $1.5 billion, has filed for bankruptcy. The company, backed by Microsoft and a Qatari sovereign fund, falsely claimed to build apps in minutes using AI, while actually relying on hundreds of human engineers in India. read more
Behind bankruptcy plea of London start-up: It hired 700 Indian engineers to pose as AI tools
London-based Builder.ai, once valued at $1.5 billion and backed by Microsoft and Qatar's sovereign wealth fund, has filed for bankruptcy after it was revealed that its so-called was mostly done manually by engineers in India, According to a report from The Times of India.
According to the report, round 700 Indian engineers were while developing apps. The startup had raised over $445 million by promoting its AI-based app development platform.
STORY CONTINUES BELOW THIS AD
The company marketed its platform as using AI to build apps quickly, powered by a digital assistant named 'Natasha.'
Most of the coding was done manually
However, reports revealed that most of the coding was actually done manually by Indian tech workers, while the company falsely presented their work as AI-generated.
The collapse of Builder.ai
The collapse began in May 2025 when lender Viola Credit seized $37 million from Builder.ai's accounts after discovering the company had inflated its 2024 revenue by 300 per cent. Founder Sachin Dev Duggal had claimed $220 million in sales, but an audit revealed the actual figure was just $50 million.
All engineer, no AI
Concerns about Builder.ai's AI claims had surfaced as early as 2019, when The Wall Street Journal reported that the platform largely depended on human engineers rather than real AI. Former employees described it as 'all engineer, no AI,' according to the report.
The scheme fully unravelled when the new CEO, Manpreet Ratia, who replaced Duggal in February, discovered the extent of the financial misreporting. US prosecutors have since launched an investigation and requested access to the company's records and customer data.
Biggest AI startup collapse
Builder.ai's downfall is considered the biggest AI startup collapse since the ChatGPT-driven investment boom began. The company now owes $85 million to Amazon and $30 million to Microsoft in cloud computing bills. About 1,000 employees have lost their jobs.
'AI washing' in the time of boom
The case has sparked renewed concerns over 'AI washing', a growing trend where companies rebrand traditional services as AI-powered to attract investment during the current tech boom.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
30 minutes ago
- Indian Express
For a $5 trillion economy, India must embrace cutting-edge tech
The Indian economy is on the threshold of crossing another milestone and becoming the fourth-largest in the world. It is a commendable achievement for a country that began its journey as an independent nation in 1947 with a meagre $33-billion economy. Decades of British exploitation left it significantly weakened and poor. The Jawaharlal Nehru government's Soviet-style central planning, while promoting heavy industries and the public sector, led to low economic growth of 3-4 per cent, pejoratively described as the 'Hindu rate of growth'. In 40 years, it could only reach the $266 billion mark. The first major leap came in 1991 when the Narasimha Rao government introduced economic liberalisation and unleashed the potential of Indian entrepreneurs. The opportunity offered by the digital revolution with the introduction of the internet was quickly seized by some of India's brightest tech entrepreneurs. The Indian economy grew manifold in the next two decades on the strength of its services economy, which contributed 60 per cent of the nation's GDP. The economy crossed $2 trillion by the time the Narendra Modi government came to power. The last 10 years have seen the Modi government giving greater emphasis to faster economic growth through programmes like Stand-Up India, Start-Up India and Make in India. The results are there to see. IMF data from May has projected that the Indian economy will overtake Japan this year, reaching the $4.19 trillion mark. Japan was once a $5.8 trillion economy but has shrunk to $ 4.18 trillion due to stagnation and slow growth rates since the 1990s. As India demonstrated promising growth, naysayers rushed forward to raise the hollow bogey of per capita income. Per capita income is determined by factors like the size of the population. India is the world's most populous country. As a result, whatever may be the size of GDP, its per capita figures are bound to remain low. No country's growth can be measured on the criterion of per capita income alone. Although the US is the world's largest economy with a $28 trillion GDP, it ranks seventh in per capita. China, the second-largest economy with $18 trillion, ranks 69. The per capita argument is worthless because even if India becomes the world's largest economy with $30 trillion, it will still be ranked 55th in terms of per capita. The only merit of this argument is that the country should be able to provide better living standards to all its citizens. In democracies, the fruits of economic growth percolate to all sections of society. This is reflected in the consumption patterns. Surveys indicate that the monthly per capita expenditure (MPCE) has increased in India by more than 2.5 times in the last 10 years. Interestingly, most of this expenditure was on travel, health and education, indicating healthy growth parameters. Tourism has seen remarkable growth in the last 10 years. China still occupies the first rank in the number of domestic and international travellers. India lagged in this sector for decades due to a lack of disposable income and tourism infrastructure. But today, with the incomes of the middle class growing substantially, Indians have started travelling more. Data indicates about 2.5 billion domestic tourist visits last year. Figures for 2024 indicate that almost 29 million Indians travelled abroad marking a 30 per cent growth. All this indicates healthy economic growth, which has led to the near eradication of baseline poverty and the creation of a strong middle class with disposable income. The Modi government aspires to take the economy to further heights with targets ranging from $ 5 trillion in 2027 to $10 trillion in 2035. The current impressive growth is a result of corrective measures taken by the government. It removed parallel economy, allowed proper distribution of wealth and encouraged greater consumption. But the path from here needs to be calibrated carefully. Economies grow on the strength not just of consumption but also trade and technology. Quality, quantity and speed are the main determining factors. India and China were leading economies until the middle of the 18th century. But when the industrial revolution occurred first in England and later in America, those two countries surged ahead and became leading economic powers by the dawn of the 20th century. When automation and digitisation progressed in the last decades of the last century, China moved ahead of the curve, emerging as the second-largest economy by 2008. We are now in the post-manufacturing and post-digital era. Growth in frontier technologies will determine a country's economic future. A country of India's size and capability cannot just think perpetually in terms of catching up with the developed West and the rest. It has to, instead, think in terms of moving ahead of the curve. We missed the first two industrial revolutions as we were a slave nation at that time. We benefitted partially from the third, digital revolution of the 1980s and '90s and became a leader in sectors like IT services. But the Fourth Industrial Revolution, led by Artificial Intelligence (AI), quantum technologies, robotics, space, defence, crypto and bio-engineering calls for new thinking and new priorities. The impressive growth of the Indian economy in the last decade was largely due to the unleashing of its basic potential. The trajectory from here should be more strategic, with greater emphasis on deep-tech R&D, an area in which we lag. It is important to create a climate of hassle-free access to investments in these areas. Only then can India aspire to achieve its goal of becoming a $10 trillion economy in the next 10 years. The writer, president, India Foundation, is with the BJP
The Hindu
44 minutes ago
- The Hindu
India, U.S. trade talks extended as deadline looms for interim deal, sources say
Trade talks between Indian and U.S. officials have been extended into next week as both sides seek consensus on tariff cuts in the farming and auto sectors, aiming to finalise an interim deal before a July 9 deadline, government sources said. A U.S. delegation led by senior officials from the Office of the United States Trade Representative (USTR) held two days of discussions in the national capital with trade officials headed by chief negotiator Rajesh Agrawal, the sources said. Also Read | India-U.S. trade deal in 'not too distant future': U.S. Commerce Secretary Lutnick "The two countries are actively engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, enhance supply chain resilience and integration," one Indian government official with direct knowledge of the talks, said. Negotiators, who had initially aimed to wrap up talks by Friday, will now continue discussions on Monday and Tuesday to resolve outstanding differences, a second official said. U.S. President Donald Trump and Prime Minister Narendra Modi had agreed in February to conclude a bilateral trade pact by fall 2025 and more than double trade to $500 billion by 2030. The current talks are part of efforts to hammer out a limited trade agreement that could lead the Trump administration to revoke 26% reciprocal tariffs on Indian goods - tariffs that have been paused along with those on several other U.S. trading partners for 90 days, the second official said. "Many Indian exporters have held back shipments to the U.S. in the last two weeks, fearing cargos may not reach before the July 9 deadline,' the official added. India's exports to the U.S. jumped nearly 28% year-on-year to $37.7 billion in the January–April period, driven by front-loading of shipments ahead of tariff hikes in April, while imports rose to $14.4 billion, widening the trade surplus in India's favour, according to US government data. Centre approved a licence for Elon Musk's Starlink to launch commercial operations, ignoring his public spat with Mr. Trump, Reuters reported on Friday. India is opposing U.S. demands to open up its agricultural and dairy markets, another Indian official said, citing the impact on millions of poor farmers who cannot compete with heavily subsidised American products. Indian officials have also made it clear New Delhi could pursue its complaint at the World Trade Organisation against the U.S. tariff hikes on steel and aluminium, while aiming to work out a bilateral agreement, the source added.
Hans India
44 minutes ago
- Hans India
Musk calls for impeachment of Trump
Washington: Amid the brewing tensions between US President Donald Trump and Tesla CEO Elon Musk, the tech billionaire called for the impeachment of the Republican firebrand. He went ahead, saying US Vice President JD Vance should replace Trump in the Oval Office, leaving many shocked. Musk's remarks came in response to an X post demanding the impeachment of the 47th President of the United States. 'President vs Elon. Who wins? My money's on Elon." 'Trump should be impeached, and JD Vance should replace him,' Ian Miles Cheong, a Malaysia-based right-wing writer, said in a post on Thursday afternoon. 'Yes,' Musk said in response to Cheong's post about 20 minutes later. The brief friendship between Musk and Trump nose-dived into an abyss due to a disagreement over Trump's 'Big Beautiful Bill', which pushes for tax cuts and other spending measures. Things escalated quickly after Musk claimed that Trump is part of the Epstein Files, calling it the reason why it is not being fully released. While speaking to reporters at the Oval Office, Trump narrated the downfall of his and Musk's friendship, with many calling it a therapy session rather than a meeting with a foreign leader. He recalled Musk's farewell press conference and mentioned how the billionaire stood next to the President with a black eye. 'You saw a man who was very happy when he stood behind the Oval desk, and even with the black eye. I said, You want a little makeup? We'll get you a little makeup,' Trump said. 'But he said, 'No, I don't think so,' which is interesting and very nice. He wants to be who he is.' Interestingly, at that time, Musk was facing reports of drug use during his time as the head of the Department of Government Efficiency. Trump also mentioned that he could understand why Musk was upset with some steps he had taken, including withdrawing a nominee to lead the NASA space agency who was supported by the tech tycoon. The POTUS was narrating this saga while sitting in front of German Chancellor Friedrich Merz, who had no other option but to sit silently through it all. At the heart of the Trump-Musk feud is the 'big, beautiful bill' on tax and spending. The centrepiece of his domestic agenda, it aims to continue tax cuts from his first term and is being touted as the make-or-break bill for Republican prospects in the 2026 midterm elections. Musk slammed the bill, calling it a 'disgusting abomination' on Tuesday, because it will increase the US deficit. A day later, the magnate called for Republicans to 'kill the bill,' and for an alternative plan that 'doesn't massively grow the deficit.'
