Latest news with #ManpreetRatia
Int'l Business Times
5 days ago
- Business
- Int'l Business Times
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. 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 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 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. 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
Yahoo
27-05-2025
- Business
- Yahoo
Builder.ai's Shocking $450M Fall: Microsoft And QIA-Backed No-Code AI Darling Files For Bankruptcy After Creditor Seizure
the British no-code AI startup once celebrated for its strategic partnership with Microsoft (NASDAQ:MSFT) and a $250 million raise led by the Qatar Investment Authority, announced Tuesday that it is filing for bankruptcy protection. According to Bloomberg, the dramatic fall comes after a major lender, Viola Credit, seized $37 million from the company's accounts, leaving just $5 million in restricted funds, effectively paralyzing operations across five countries. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm — 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. CEO Manpreet Ratia replaced founder Sachin Dev Duggal earlier this year in a boardroom shake-up aimed at restoring investor confidence. Ratia said that most of the company's employees have been laid off and that will now begin bankruptcy filings in each of its operational jurisdictions, including the U.K., U.S., UAE, Singapore, and India, Bloomberg reports. Founded in 2016, positioned itself as a revolutionary tool for businesses to build custom apps using AI with minimal coding. It raised over $450 million in total funding, attracting marquee investors like Microsoft, the World Bank's IFC, Jeffrey Katzenberg's WndrCo, Lakestar, and SoftBank's DeepCore incubator, Bloomberg reports. In May 2023, Microsoft made an equity investment and announced plans to integrate platform with its own Azure and AI services. offered a platform that allowed businesses to create custom smartphone apps with little or no coding, aiming to simplify and accelerate the app development process. The company positioned itself as a no-code AI solution, gaining attention during the surge of interest in generative AI, Bloomberg says. However, recent developments signaled deeper challenges within the company's operations. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Less than two months ago, confirmed it had revised down key sales figures and appointed auditors to examine financials from the past two years. Former employees raised concerns that sales performance had been inflated in previous investor briefings. According to Bloomberg, these allegations triggered a domino effect of investor caution, internal restructuring, and eventual loss of confidence. The turning point came when Viola Credit, which had lent the company $50 million in 2023, seized $37 million from its accounts, leaving unable to meet payroll obligations or continue core operations. The remaining funds, located in Indian accounts, are restricted due to regulatory limitations, Ratia told Bloomberg. The insolvency proceedings reflect a growing wave of AI startup turbulence. Phil Brunkard, executive counselor at Info-Tech Research Group, told Computer World that many AI firms rushed to scale on the back of hype, often lacking strong financial controls or truly differentiated situation is complicated by its international footprint, Bloomberg reports. Insolvency laws differ across the five regions where it operates, with the U.K. process involving the appointment of a court-approved administrator. The company said in the LinkedIn statement that it will work closely with administrators to explore options for salvaging parts of the business, while also prioritizing communication with affected employees, customers, and partners. expressed gratitude to its team and stakeholders in the statement, but acknowledged that past missteps had pushed the company beyond recovery. For a firm once hailed as the future of no-code AI, the collapse may highlight growing scrutiny around startup fundamentals amid the AI investment boom. Read Next: Invest where it hurts — and help millions heal:. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? MICROSOFT (MSFT): Free Stock Analysis Report This article Shocking $450M Fall: Microsoft And QIA-Backed No-Code AI Darling Files For Bankruptcy After Creditor Seizure originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
21-05-2025
- Business
- Business Times
Microsoft-backed Builder.ai set for bankruptcy after cash seized
[LONDON] the British artificial intelligence startup backed by Microsoft and the Qatar Investment Authority, is filing for bankruptcy after the chief executive officer said a major creditor had seized most of its cash. Viola Credit, which provided US$50 million in debt to the software firm last year, has seized US$37 million from accounts, leaving the company with US$5 million, chief executive officer Manpreet Ratia said in an interview on Tuesday (May 20), without giving a clear reason for the seizure. Viola didn't immediately respond to a request for comment left after business hours. The company, which operates in five jurisdictions – the UK, the US, India, the United Arab Emirates and Singapore – will file for bankruptcy in due course, following each region's process, Ratia said. With the startup short on cash, Ratia said he'd made the difficult decision to let go of most of employees. The company's remaining US$5 million is located in Indian accounts and couldn't be used to pay workers due to restrictions on the movement of money out of the country, he said. The proceedings mark a stunning fall from grace for a company that two years ago raised a US$250 million funding round led by QIA, one of the world's biggest sovereign wealth funds. Microsoft also made an equity investment in 2023 as part of a strategic partnership. Less than two months ago, confirmed to Bloomberg News that it had been forced to lower sales estimates provided to investors and had hired auditors to examine two years of accounts. This came in response to questions from Bloomberg about former employees' concerns that the company inflated sales figures. missteps show the risks inherent in the rush to back promising AI startups, as investors seek to replicate the success of heavyweights such as OpenAI and Anthropic. After the debut of ChatGPT, London-based rode investor enthusiasm for AI to attract big-name investors. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The firm's founder, Sachin Dev Duggal, stepped down as CEO in February and was replaced by Ratia. At the time, also cut its board to five seats from nine, and asked Duggal to relinquish four of the five seats he controlled. 'The business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,' said in a statement on Tuesday. The firm will appoint an administrator to manage the company's affairs, it added. Microsoft and QIA didn't respond to requests for comment. The World Bank Group's International Finance, Hollywood mogul Jeffrey Katzenberg's WndrCo, Lakestar and SoftBank Group's DeepCore incubator have also invested in the company. Insolvency cases in the UK, where is based, and in countries with similar laws are different from bankruptcies in the US. UK insolvencies are typically overseeing by a court-approved administrator who works directly with creditors, bypassing current managers. In the US, managers stay in place and any major decisions, like selling assets or borrowing money, must be approved by a federal judge. The two systems both typically require creditors to vote on any reorganisation plan. Established in 2016, offers a platform for businesses to create custom smartphone apps while requiring little or no coding, allowing a faster turnaround than traditional outsourcing of software projects. BLOOMBERG
Straits Times
21-05-2025
- Business
- Straits Times
Once worth over $1.3 billion, AI start-up Builder.ai filing for bankruptcy
stunning fall from grace show the risks inherent in the rush to back promising AI start-ups. PHOTO: LONDON – the British artificial intelligence start-up backed by Microsoft and the Qatar Investment Authority (QIA), is filing for bankruptcy after its chief executive officer said a major creditor had seized most of its cash. is also backed by Singapore-based venture capital investor Jungle Ventures, according to other media reports. Viola Credit, which provided US$50 million (S$65 million) in debt to the software firm in 2024, has seized US$37 million from accounts, leaving the company with US$5 million, CEO Manpreet Ratia said in an interview on May 21, without giving a clear reason for the seizure. Viola didn't immediately respond to a request for comment left after business hours. The company, which operates in five jurisdictions – the UK, the US, India, the United Arab Emirates and Singapore – will file for bankruptcy in due course, following each region's process, Mr Ratia said. With the start-up short on cash, Mr Ratia said he'd made the difficult decision to let go of most of employees. The company's remaining US$5 million is located in Indian accounts and couldn't be used to pay workers due to restrictions on the movement of money out of the country, he said. The proceedings mark a stunning fall from grace for a company that two years ago raised a US$250 million funding round led by QIA, one of the world's biggest sovereign wealth funds. It achieved a valuation of over US$1 billion (S$1.3 billion), earning it 'unicorn' status. Microsoft also made an equity investment in 2023 as part of a strategic partnership. Less than two months ago, confirmed to Bloomberg News that it had been forced to lower sales estimates provided to investors and had hired auditors to examine two years of accounts. This came in response to questions from Bloomberg about former employees' concerns that the company inflated sales figures. missteps show the risks inherent in the rush to back promising AI start-ups, as investors seek to replicate the success of heavyweights such as OpenAI and Anthropic. After the debut of ChatGPT, London-based rode investor enthusiasm for AI to attract big-name investors. The firm's founder, Sachin Dev Duggal, stepped down as CEO in February and was replaced by Mr Ratia. At the time, also cut its board to five seats from nine, and asked Mr Duggal to relinquish four of the five seats he controlled. 'The business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,' said in a statement on May 20. The firm will appoint an administrator to manage the company's affairs, it added. Microsoft and QIA didn't respond to requests for comment. The World Bank Group's International Finance Corp., Hollywood mogul Jeffrey Katzenberg's WndrCo, Lakestar and SoftBank Group's DeepCore incubator have also invested in the company. Established in 2016, offers a platform for businesses to create custom smartphone apps while requiring little or no coding, allowing a faster turnaround than traditional outsourcing of software projects. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Mint
20-05-2025
- Business
- Mint
Microsoft-Backed Builder.ai Set for Bankruptcy After Cash Seized
(Bloomberg) -- the British artificial intelligence startup backed by Microsoft Corp. and the Qatar Investment Authority, is filing for bankruptcy after the chief executive officer said a major creditor had seized most of its cash. Viola Credit, which provided $50 million in debt to the software firm last year, has seized $37 million from accounts, leaving the company with $5 million, Chief Executive Officer Manpreet Ratia said in an interview Tuesday, without giving a clear reason for the seizure. Viola didn't immediately respond to a request for comment left after business hours. The company, which operates in five jurisdictions — the UK, the US, India, the United Arab Emirates and Singapore — will file for bankruptcy in due course, following each region's process, Ratia said. With the startup short on cash, Ratia said he'd made the difficult decision to let go of most of employees. The company's remaining $5 million is located in Indian accounts and couldn't be used to pay workers due to restrictions on the movement of money out of the country, he said. The proceedings mark a stunning fall from grace for a company that two years ago raised a $250 million funding round led by QIA, one of the world's biggest sovereign wealth funds. Microsoft also made an equity investment in 2023 as part of a strategic partnership. Less than two months ago, confirmed to Bloomberg News that it had been forced to lower sales estimates provided to investors and had hired auditors to examine two years of accounts. This came in response to questions from Bloomberg about former employees' concerns that the company inflated sales figures. missteps show the risks inherent in the rush to back promising AI startups, as investors seek to replicate the success of heavyweights such as OpenAI and Anthropic. After the debut of ChatGPT, London-based rode investor enthusiasm for AI to attract big-name investors. The firm's founder, Sachin Dev Duggal, stepped down as CEO in February and was replaced by Ratia. At the time, also cut its board to five seats from nine, and asked Duggal to relinquish four of the five seats he controlled. 'The business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,' said in a statement Tuesday. The firm will appoint an administrator to manage the company's affairs, it added. Microsoft and QIA didn't respond to requests for comment. The World Bank Group's International Finance Corp., Hollywood mogul Jeffrey Katzenberg's WndrCo, Lakestar and SoftBank Group Corp.'s DeepCore incubator have also invested in the company. Insolvency cases in the UK, where is based, and in countries with similar laws are different from bankruptcies in the US. UK insolvencies are typically overseeing by a court-approved administrator who works directly with creditors, bypassing current managers. In the US, managers stay in place and any major decisions, like selling assets or borrowing money, must be approved by a federal judge. The two systems both typically require creditors to vote on any reorganization plan. Established in 2016, offers a platform for businesses to create custom smartphone apps while requiring little or no coding, allowing a faster turnaround than traditional outsourcing of software projects. --With assistance from Steven Church. (Updates with details from CEO interview starting in the first paragraph and throughout) More stories like this are available on
