AI Startup Backed by Microsoft Revealed to Be 700 Indian Employees Pretending to Be Chatbots
A once-hyped AI startup backed by Microsoft has filed for bankruptcy after it was revealed that its so-called artificial intelligence was actually hundreds of human workers in India pretending to be chatbots.
Builder.ai, a London-based company previously valued at $1.5 billion, marketed its platform as an AI-powered solution that made building apps as simple as ordering pizza. Its virtual assistant, "Natasha," was supposed to generate software using artificial intelligence.
In reality, nearly 700 engineers in India were manually coding customer requests behind the scenes, the Times of India reported.
The ruse began to collapse in May when lender Viola Credit seized $37 million from the company's accounts, uncovering that Builder.ai had inflated its 2024 revenue projections by 300%. An audit revealed the company generated just $50 million in revenue, far below the $220 million it claimed to investors.
A Wall Street Journal report from 2019 had already questioned Builder.ai's AI claims, and a former executive sued the company that same year for allegedly misleading investors and overstating its technical capabilities.
Despite that, the company raised over $445 million from big names including Microsoft and the Qatar Investment Authority. Builder.ai's collapse has triggered a federal investigation in the U.S., with prosecutors in New York requesting financial documents and customer records.
Founder Sachin Dev Duggal stepped down earlier this year and was replaced by Manpreet Ratia, who reportedly uncovered the company's internal misrepresentations.
The company now owes millions to Amazon and Microsoft in cloud computing costs and has laid off around 1,000 employees. On LinkedIn , the company announced its entry into insolvency proceedings, citing "historic challenges and past decisions" that strained its finances.
The fallout is seen as one of the biggest failures of the post-ChatGPT AI investment boom and has renewed scrutiny of "AI washing"—the trend of rebranding manual services as artificial intelligence to secure funding.
Originally published on Latin Times
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
3 hours ago
- Int'l Business Times
You're Already Using Voice AI at Work — Here's How It's Changing Everything
Welcome to Tech Times' AI EXPLAINED , where we look at the tech of today and tomorrow. Brought to you by Using voice AI at work is already happening. You might think AI at work means typing prompts into ChatGPT or getting a slick summary from your inbox. But the real shift is happening in your ears. From whispered prompts during Zoom calls to voice bots taking fast food orders, AI is quietly changing how we work, and you might not even realize it's there. Voice AI isn't just a flashy gadget or customer service gimmick. It's becoming a built-in layer across industries: transcribing your meetings, answering your calls, and even drafting your doctor's notes. As tools like Microsoft Copilot, and drive-thru voice bots quietly embed themselves in daily workflows, they're not only reshaping tasks, they're shifting what it means to show up, speak up, and stay relevant in a workplace that's learning to listen. Game studio founder and voice AI advisor Mike Sorrenti is bullish on the tech. "Voice ai is an excellent thing. It can be used for translation and many other things and if a very natural interface for kids, and older adults especially those with mild disabilities such as arthritis," he said in an email. Enhancing Workplace Productivity with Voice AI Visitors interact with Microsoft Copilot demos at a tech event, where AI-powered assistants like voice-enabled copilots are reshaping how we collaborate at work. A recent UK government study showed that civil servants who used Microsoft's Copilot AI for administrative tasks saved an average of 26 minutes a day, which works out to about two weeks of gained time per year. Voice AI plays a key role in this shift from the pre-AI workplace to the current AI workplace, becoming useful in transcription, summarization, and virtual meeting assistants. Previously, you'd have to have a human assistant sit in on your Zoom or Microsoft Teams meetings to take notes, or delegate someone who may or may not be good at live note-taking to manage these. Voice AI assistants can now log, transcribe and summarize your meetings, often without the people in the meeting really understanding what's being recorded or how it's being analyzed. Workers are already adjusting how and when they speak during meetings, knowing that their words might be captured and re-contextualized by AI summaries. has also introduced a voice-activated AI version of its AI meeting assistant, letting users join and manage meetings without having to take notes. Now that we're used to asking Siri to take a note or set a timer, asking your AI voice agent to start recording will be a cinch. The shift from passive transcription to an interactive agentic AI system is subtle, but it is here. Users can even give verbal commands mid-meeting, obviating the need for someone who understands the user interface of an app, for example, or web controls, all in real-time. This isn't a backend utility, either; rather, tools like Otter are becoming active participants in meetings, giving us a glimpse at a future where AI agents might take on even more collaborative roles. While tools like this save time and offer easier control, the issues of privacy, consent, surveillance, and etiquette in meetings (especially in hybrid or remote work environments can be substantive. But first, a quick casting call for our sponsor and partner of AI EXPLAINED this month, PlaudAI - the No.1 AI note-taker that does exactly what you'd imagine an AI assistant can do in 2025. Do you use voice AI in your daily work? Are you a journalist, doctor, lawyer, educator, or creator doing something smart with your voice? We're spotlighting modern professionals for a new series with our sponsor, — share your story with us here , and you could be featured and receive a sample of PlaudAI. Voice AI Has Already Transformed Customer Service and Retail Experiences A call center employee works with a headset, illustrating how voice-based tools have long been part of the workplace — and how AI is now transforming those interactions. As a consumer, driving through the fast-food lane can be a common experience. You pull up to the speaker, ask for the food you want, and go grab it after you pay at the next window. If you've been in one recently, you may have heard some rudimentary voice AI ask you if you used a mobile ordering app. But that's all about to get even more AI-powered. Sophie Fennelly knows that voice AI is happening now. "As CEO of Sales TQ, with over a decade in enterprise sales and an analytical background from MIT, I've helped small businesses adopt emerging technologies—including voice AI—to improve operations," she wrote in an email. "Voice AI is no longer just futuristic hype; it is actively reshaping how we work and live." Hungry Jack's, a fast food chain in Australia, just began trials of a new AI-driven voice assistant for its own drive-through orders. Customers appreciated the system's politeness while the company likely appreciates the potential for late-night staffing. Employees, though, might start to feel the pinch, or start moving to parts of the job that tech can't yet replicate, like solving problems, connecting with people, or hopping in when the system makes a mistake. Australian franchises of KFC have also started testing out AI-driven voice ordering, though customers there have pushed back a bit, saying they prefer human interaction and their orders being misinterpreted by the AI window jockey. Still, even this workplace is evolving as AI starts to support and replace humans in these high-turnover, low-wage roles. As a consumer, you might have to learn how to talk to AI bots, and as a worker, you'll likely need to up your skills to fit roles that need a more human touch. Revolutionizing Healthcare with Ambient Voice AI A doctor speaks during an interview, highlighting how voice AI tools are increasingly being adopted in healthcare settings — from clinical dictation to patient notes. Microsoft's DAX Copilot automates recordkeeping, updates patient records, and can draft care plans all from just listening in to conversations between doctors and patients. The idea is that physicians can spend more time on patient care than on record keeping, thereby improving health outcomes for more people. Microsoft is also transforming the workplace of nurses, with ambient voice and other AI technologies becoming integrated into nursing workflows, alleviating the burden of so much documentation, reducing burnout, and allowing nurses to spend more time on patient care. Global Reach and No-Code Tools for Voice AI A startup in Bengaluru (formerly Bangalore) in southern India is offering a no-code conversational AI platform that lets other businesses deploy real-time, multilingual voice agents for customer support and services. Ring AI has expanded beyond India to the Middle East and Latin America, supporting languages like Arabic and Spanish. Global workplaces that couldn't afford the high-cost development of their own voice AI systems can now contract with Ringg AI and deploy AI agents to help them with their businesses. While that does mean that AI tools may replace workers at major companies, it does mean that smaller shops can afford the cost of entry to compete on the level of voice AI at larger corporations. Gev Balyan, CEO of Hoory AI says, "Startups and solopreneurs now have an always-on assistant — answering calls, qualifying leads, booking — at enterprise scale, without enterprise cost." What It All Means For You A glowing AI key on a sleek keyboard symbolizes how artificial intelligence — including voice-powered assistants — is becoming a built-in part of everyday work tools. So what does the current adoption of Voice AI mean for you. Whether you're running (or taking) meetings, answering customer support calls, or just trying to get through all the email you receive in a day, Voice AI is likely becoming a bigger part of your day, whether you realize it or not. The tools are changing how we connect with colleagues and higher-ups, the tasks that make up our daily work, and even what kinds of jobs are growing (or shrinking). As an employee, it could mean you'll do fewer routine tasks and spend more time thinking, making decisions, or even managing these AI tools directly. But you'll still need to learn to work with AI, knowing what it's good at, how to manage it when if makes mistakes, and how to communicate with AI tools that are always listening. As a business owner, you might feel like AI will boost your workers' productivity while reducing costs, but you'll also need to keep an eye out on issues of privacy, trust, and training. You may want to start hiring people who have higher levels of judgment, empathy, and communication to be able to work with your new AI systems. Bottom line, AI isn't coming for your job all at once, but it is coming to change parts of your job already. The best thing here is to stay relevant by focusing on what you can do that AI can't, yet: connect with others, understand nuance, and adapt when things go off the rails. Originally published on Tech Times
DW
6 hours ago
- DW
India is reaching for its own world-class AI engine – DW – 06/05/2025
Despite thousands of AI startups cropping up in India, the nation has yet to produce its own premium AI engine. Why is there no Indian version of DeepSeek or ChatGPT? With over 5 million IT workers and a growing focus on artifical intelligence (AI) in education, Indiaseems to be in an ideal position for what is shaping up to be a global race in AI technology. But while the US set the global AI standard with ChatGPT in 2023, and China quickly closed the gap with its powerful chatbot DeepSeek, India has yet to produce an equivalent Large Language Model (LLM) that can mimic human communication. And it's not for the lack of ambition. According to data from market intelligence firm Tracxn, the Indian AI sector includes 7,114 startups that have collectively raised $23 billion (€20.15 billion) in equity funding so far. Last year, Prime Minister Narendra Modi's Cabinet approved the IndiaAI Mission initiative with a budget of nearly $1.21 billion, aiming to "undertake the development and deployment of indigenous Large Multimodal Models (LMMs) and domain-specific foundational models in critical sectors." DeepSeek: Cheap AI model shakes up tech industry To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video This week, IndiaAI Mission CEO Abhishek Singh said Indian startups need to think beyond their home turf to compete and succeed against global giants. "They will have to ultimately compete with the best in the world," Singh said at the Accel AI Summit in Bengaluru. "Initial level of support may come from the government, but that will not sustain them in the long run." "They will have to have a global vision in mind when they are training models," Singh said. AI development needs industry, government and academia Representatives of the National Association of Software and Service Companies (NASSCOM), the voice of India's $283 billion tech industry, point out that building a globally recognized AI model is a complex, resource-intensive process. "The argument is not whether India can catch up, but whether we can move fast enough and define an AI identity on our own," Satyaki Maitra, senior manager communications of NASSCOM, told DW. Last week, IndiaAI Mission announced the addition of 15,916 Graphics Processing Units (GPUs), which are essential for AI research due to their capacity to perform calculations in parallel. The latest boost will bring the total national AI computing capacity to 34,333 GPUs through public-private partnerships. NVIDIA profits up, despite trade war challenges To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Startups such as Gan AI, Gnan AI, SarvamAI and Soket AI, supported by the IndiaAI Mission, are building foundational models tailored to India, while firms like Sarvam AI, Fractal and CoRover AI are focusing on AI innovation. "However, AI success cannot be achieved through isolated innovation," said Maitra. "It requires cohesive collaboration between government, industry, and academia to build the full value chain, from compute and data governance to model training and real-world deployment." What is holding Indian AI back? Pawan Duggal, the country's foremost cybersecurity expert, told DW that India is likely to face a shortage of high-end AI hardware, limited access to advanced GPUs, and insufficient cloud computing resources, which are essential for training large-scale AI models. "There is also a significant investment shortfall when compared to global peers. While venture capital investment in Indian AI startups has increased, it remains a fraction of what is seen in the US or China," said Duggal. "The US invested $2.34 trillion and China $832 billion in ventures and startups from 2014 to 2023, while India invested $145 billion in the same period," he added. Can AI blackmail us? Facts vs. fear To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Duggal believes that India is already moving towards creating its own AI model, but it has yet to address significant challenges including infrastructure, funding, talent, data, and regulation. 'Brains are plenty in India' Another issue facing Indian engineers is the diversity of languages in India, with English being just one of 22 official languages in the world's most populous country. Furthermore, official languages make up only a tiny faction of over 1,600 languages spoken within its borders. "The only use-case of an 'Indian' LLM is if it works in our various languages which is difficult as of now given that there is a lack of quality data for LLMs to train on in most Indian languages," Yash Shah of Momentum 91, a leading custom software development company, told DW. "For an LLM in English, there are other companies and countries which are far ahead of us and would continue to be that way," said Shah. 'Godfather of AI' urges tougher government rules To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video However, Utpal Vaishnav of Upsquare Technologies, a global technology holding company, says the real obstacles are actually "risk-shy investors, patchy data rules, and tight GPU supply." "Brains are plenty in India. GPUs are on the way and our multilingual data is waiting to be shaped. Give this talent, patient capital and clear problems and a compact, world-class LLM can be launched in two, three years," Vaishnav told DW. Edited by: Darko Janjevic
DW
10 hours ago
- DW
How the fragile US-China trade truce is unraveling – DW – 06/05/2025
Donald Trump has accused Beijing of breaching last month's deal to cut steep tit-for-tat tariffs. Could a much-awaited call between the US and Chinese presidents break the deadlock? The world exhaled when the United States and China unveiled a 90-day tariff truce last month, pausing the escalating trade war between the globe's largest and second-largest economies, which had rattled businesses and investors. The deal, after tense negotiations in Geneva, slashed US tariffs on Chinese imports from 145% to 30% and China's retaliatory levies on US goods from 125% to 10%. Just three weeks later, however, US President Donald Trump reignited tensions, saying that China had "totally violated" the truce deal, without providing further details. Trump later said his Chinese counterpart, Xi Jinping, was "extremely hard to make a deal with." China swiftly countered, asserting that Washington had imposed "discriminatory and restrictive measures" since the Geneva talks, pointing to US curbs on chip design software and warnings about artificial intelligence (AI) chips produced by Chinese tech giant Huawei. Deal stalled over US access to rare earths US policymakers have voiced frustration at China's stalling on export license approvals for rare earths and other elements needed in the high-tech, defense, and clean energy sectors. China, which dominates global rare-earth production with over two-thirds of supply and 90% of processing capacity, has imposed export restrictions on several key minerals. The US, lacking domestic rare-earth processing capacity, remains highly vulnerable to Beijing's restrictions. Confusion remains over what was agreed on rare earths in Geneva. In an interview with news agency Bloomberg on Wednesday, Cory Combs, head of critical-mineral supply chain research at Trivium China, said Washington believed that Beijing would "completely remove the requirement of an approval [for export licenses]," which Beijing said it did not agree to. Michael Hart, AmCham China president, told the Financial Times on Monday that China has now stepped up approvals to ship rare earths to several US carmakers, noting how "only a handful" of officials are handling thousands of applications. Trump's economic philosophy: A real plan or simply chaos? To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Penny Naas, a distinguished fellow at the US-based German Marshal Fund think tank, thinks the rare earths are "China's biggest card," telling DW that "a key part of the negotiation will be when and how they liberalize the trade in those products." Naas expressed little surprise at the renewed war of words between Washington and Beijing, noting that, "You often see these highs and lows and even near-death experiences before deals are reached." But with the clock ticking until August 12 — when the 90-day pause expires — and both sides accusing the other of violations, the prospects for a lasting ceasefire and a long-term deal remain uncertain. Trump uses tariffs for maximum leverage Beyond securing access to China's rare minerals, the US seeks to cut its trade deficit with China, which was $295 billion (€259 billion) in 2024 — up nearly 6% on the previous year. The Trump administration has urged Beijing to boost purchases of American goods and eliminate non-tariff barriers, such as anti-monopoly probes targeting US companies and the designation of certain American firms as "unreliable entities." Washington has also demanded further economic reforms and an end to the manipulation of the Chinese yuan, which is kept artificially low to help boost exports. In April, when Trump announced his unprecedented tariffs, the yuan hit a 20-month low of 7.2038 against the dollar and is expected to weaken further if the higher US levies are reinstated. Trump has also pressed China to strengthen efforts to curb illegal immigration and halt exports of precursor chemicals used to produce fentanyl, an opioid fueling a public health crisis in the US. Will Trump-Xi call break the impasse? With US Treasury Secretary Scott Bessent acknowledging last week that negotiations have "stalled," all eyes are on whether a call between Trump and Xi will break the tariff deadlock. The US president has said for months that the two leaders were due to speak and even spoke of traveling to China for talks, without a public response from Beijing. US President Donald Trump said his Chinese counterpart is 'extremely hard' to make a deal with Image: Francis Chung/Imago The White House said Monday that a Trump-Xi call was "likely" to take place this week, a development that Antonio Fatas, an economics professor at INSEAD business school, said the US president would see as "his victory." "Trump's typically the one who calls people and tells them what to do," Fatas told DW. "But with a powerful player like China, that's not going to work. I wouldn't be surprised if China postpones the call." Although Trump will get the chance to talk to other world leaders on the sidelines of the upcoming G7 and NATO summits, the US and Chinese presidents aren't likely to meet in person until later in the year, signaling a protracted tussle that could last several more months. Tariff court battle plays into China's hands Another boon to China could be the lack of clarity over Trump's unprecedented tariffs after a US trade court last week ruled they were illegal. Although a higher court temporarily reinstated the levies, the White House has threatened to go to the Supreme Court for the ultimate ruling. "There may be a hesitancy to go all in on an offer at this moment when there's a large lack of clarity about the US position," the German Marshall Fund's Naas told DW. INSEAD's Fatas, meanwhile, predicted that the truce would be extended beyond the 90 days, adding: "Until I see the possibility of a real compromise on both sides, I'll remain very cautious and uncertainty remains incredibly high." Tariffs distract from US-China tech battle Both the Trump and Biden administrations have prioritized maintaining the US's technological edge over China, but there are growing concerns that the tariff policies are diverting resources and focus from US firms' ability to achieve this goal. Investor nervousness that the tariffs could cause a US recession has intensified. The tariffs have already increased costs and strained budgets for American tech firms, limiting their capacity to invest in research and development (R&D) at a critical time. With tariffs consuming significant attention among US policymakers, initiatives to bolster domestic innovation risk being sidelined. NVIDIA profits up, despite trade war challenges To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Beijing, meanwhile, has doubled down on the need to reduce its dependence on US technology. Through substantial state subsidies, China has advanced its capabilities in AI, quantum computing, advanced chip production, and 6G telecommunications, narrowing the technological gap with the US. Naas thinks that China has now caught up on "most of the technological advantage the US thought it had" and that US companies say they're "falling behind while spending all their time on reorienting their supply chains." "Is that the best use of their time when we're in hand-to-hand combat on the future of technology?" she asks. Edited by: Uwe Hessler
