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Telegraph
3 days ago
- Business
- Telegraph
The £1bn British AI dream that collapsed in controversy
'It is not the critic who counts,' Sachin Dev Duggal posted on Instagram days after he was pushed out as chief executive of Builder AI. 'The credit belongs to the man who is actually in the arena … who, if he fails, at least fails while daring greatly.' Just weeks after Duggal posted this famous Teddy Roosevelt quote, Builder AI would indeed fail – and in spectacular fashion. On May 20, the London start-up confirmed that it would be appointing administrators with the loss of about 1,000 jobs. The collapse came despite Duggal, a colourful technology entrepreneur who went by the title of 'chief wizard', raising more than $450m (£334m) in funding from investors including Microsoft, Qatar's sovereign wealth fund, and venture capital investors such as Insight Partners. Builder AI had claimed to use 'human-assisted AI', including a bot called 'Natasha', to quickly and cost-effectively build apps for customers, including the BBC. Duggal, who has said he started building PCs at home at the age of 14, said the company would make building an app as easy as ordering a pizza. This vision helped Builder AI catapult to a valuation of $1.5bn, making it one of Britain's rare 'unicorns' – a private tech company worth more than a billion. Not only that, it was also operating in the field of AI, a technology Sir Keir Starmer has promised will 'deliver a decade of national renewal'. 'Zero dollars' Now, administration appears all but certain, although advisers have yet to be formally appointed. Manpreet Ratia, who was parachuted in by investors to try and save the business, told staff earlier in May that he had been left running the company with 'zero dollars', according to the Financial Times. In a letter to investors seen by The Telegraph, Ratia blamed the sudden collapse on the 'unexpected and irreversible action' of the company's senior lenders who 'swept over $40m in cash from our accounts, and restricted all access to funds, effectively shutting down our ability to operate'. According to Bloomberg, the company's lenders pulled funds after Builder AI's promised sales figures came in far below expectations. Before his exit the 42-year-old Duggal gave lenders a sales forecast in the region of $220m for 2024. After an independent audit, the actual figure came in at $50m. Builder AI was also forced to restate its sales for 2023 after previously booked sales from resellers of its technology were not collected for long periods. The Financial Times reported Builder AI commissioned a law firm to investigate the figures and experts involved in the review told Ratia that they believed there may have been past efforts to inflate sales, it was reported. In the letter from Ratia to investors, he revealed that Builder AI had borrowed $50m last year and owed $88m in cloud fees to businesses such as Amazon. A $75m capital infusion by existing investors in March was not enough to stave off collapse. Despite its lofty valuation, the company had been grappling with a series of crises for years. One source says: 'Where did it go wrong? Everywhere.' Attention-grabber Builder AI was founded in 2016 by Duggal, an Imperial College graduate who worked at Deutsche Bank before founding Nivio, a cloud computing business that he later sold. From the outset, the company caught the attention of the wider business world. Duggal was named an EY World Entrepreneur of the Year in 2024 and, that same year, he hosted the rapper at the 'BuilderPlex' event in Davos for the World Economic Forum. Yet as early as 2019, problems had begun to emerge. Builder AI and Duggal were sued by Robert Holdheim, a former employee, for $5m that year. Holdheim alleged he was dismissed after complaining that the company's technology at the time 'did not work as promoted and was essentially nothing more than 'smoke and mirrors''. At the heart of the allegation was a claim that Builder AI was far more reliant on humans than it let on. Holdheim claimed the company told investors apps were '80pc' built by a product it had 'barely even begun to develop'. Instead, it relied heavily on contractors in India, according to court filings. Builder AI disputed the allegations and the lawsuit was later settled. Duggal always insisted the company had been upfront that its AI was 'human-assisted'. Investors would later say that this combination of automation and human-helpers allowed apps to be built 'multitudes cheaper and faster' than traditional approaches. At a 2020 conference, Duggal said that ' AI doesn't mean Another Indian ', adding 'how you translate a company's mission and where it is today to the company's aspirations are two very different things'. Later, the start-up would sue Barry Kaufman, the lawyer that had brought the claims, alleging the case had been the basis of a damaging newspaper article that had cost the business $1.2bn in an investment round. The claim was ultimately dismissed. In a further lawsuit, filed this year, the lawyer accused Builder AI of using legal strong-arming to 'intimidate' its critics and 'silence' them. Legal battles Duggal, meanwhile, is involved in his own legal battles. Court records in India show that he was issued with a 'non-bailable warrant' and a demand that he come in for questioning in a case related to the collapse of Indian business Videocon, which has been the subject of a high-profile loan fraud investigation. Lawyers for Duggal have said the warrant was 'bad in law' and is 'strongly refuted'. His lawyers have insisted he is a witness in the case. The case is ongoing. Saurabh Dhoot, another Builder AI co-founder, was in 2023 named on a charge sheet brought by Indian prosecutors alleging a 'criminal conspiracy' at Videocon, which was founded by Dhoot's one-time billionaire uncle. Dhoot has not been involved with Builder AI since 2022 and has denied wrongdoing in the case. Lawyers for the Dhoot family were contacted for comment. Duggal stepped down as chief executive of Builder AI in February after the board became concerned that its projected sales for 2024 were way off the mark. The apparent accounting discrepancies that occurred under Duggal's leadership have come under legal scrutiny in recent weeks. In the days before it said it would file for administration, Builder AI received requests from US prosecutors in New York for information about its sales data, The Telegraph understands. A 'fake it till you make it' approach has long been an accepted part of the tech world, with founders and start-ups setting out ambitious visions for their products and performance as they hope to woo both investors and staff. However, investors and lenders have become less tolerant of companies that fall short as interest rates rise and following a series of high-profile failures. Still, Builder AI's dramatic end came as a shock to staff and shareholders. Investors had just injected 'rescue funding' of $75m to try and shore up the business, an effort that was quickly undone as lenders pulled support. The Telegraph also understands that Duggal agreed a $300,000 personal loan with Builder AI's chief executive, Ratia, to help meet payroll costs. The failure of Builder AI threatens to cast a shadow over the UK's AI sector at a time when Britain's start-ups are struggling to compete with their Silicon Valley peers. According to data from Dealroom, UK AI start-ups have raised about $3.1bn for the latest wave of 'generative' AI tools since 2019. US start-ups, meanwhile, have raised $84bn. Since his exit, Duggal has not been quiet. The Builder AI founder has been on panels in Dubai, where he is now based, talking up the Middle East's AI prospects on LinkedIn. Sources said he has been working independently to try and raise funds to save Builder AI or buy it out of insolvency. Duggal and his lawyers declined to comment. The founder did, however, post a note on a group for ex-Builder AI employees, many of whom have just lost their jobs. 'I know this week has been devastating for everyone,' Duggal wrote. 'Not a day goes by since I stepped away that I don't miss the builder energy.' Cryptically, the 'chief wizard', added: 'I don't think the story is done yet.'
Ammon
28-05-2025
- Business
- Ammon
Jordan's Role in the Age of Economic Empires and Political Extremes
In today's post-COVID world, governments are no longer content with slow reform and bureaucratic red tape. They're acting like conglomerates by chasing market share, competing for talent and launching bold national strategies with ambitious KPIs. It is now evident that the global game has changed. Economic visions are now the new battlegrounds. And the countries that are winning are the ones thinking really big. But as we think economically, we must not ignore the political current. The world is not just reshaping itself through growth, but it is doing so under rising ideological pressure. In Israel, Netanyahu's far-right government continues to entrench apartheid, criminalize dissent, and destabilize the region. In Germany, the opposition is now led by a woman whose views echo Europe's fascist past, and it is apparent that she is gaining real ground in mainstream politics. In the United States, President Trump's comeback is coupled with policies that many see as authoritarian, despite being wrapped in economic populism. The danger here is subtle but serious… Some countries are building through vision while others are consolidating through fear. Case Studies in Boldness: Power Plays Spanning From the Gulf to Global Markets Take India, for example. The world's most populous country is aiming to become a $5 trillion economy in the next few years. Its 'Digital India' and 'Make in India' initiatives have turned governance into a tech-driven enterprise. From a homegrown Unified Payments Interface (UPI) system to the aggressive pursuit of semiconductor independence, India is digitizing, decentralizing, and dreaming on a scale we used to think only Silicon Valley could. Then there's Indonesia. Jakarta, which has long been one of the world's most congested capitals, is being replaced altogether! The government is building an entirely new capital city called Nusantara from scratch. The $34 billion smart city is one of the most ambitious urban projects of our time, and while its final phase may only be complete in 2045, Indonesia is saying to the world 'We're not afraid to start over to move forward', which is very respectable. Saudi Arabia and The Emirates are now in open competition with one another and with the rest of the world. It's no longer just about skyscrapers and luxury malls. It's about who can attract the next 1,000 regional headquarters, who can win the AI arms race, and who can dominate logistics, trade, and tourism. Qatar, once focused on Knightsbridge real estate, is now diversifying its global assets. The country has moved beyond London and into other markets. Just four days ago, China approved the Qatar Sovereign Wealth Fund's request to purchase a 10% stake in its second largest mutual fund company. Even China, now with a per capita GDP surpassing $10,000, is in a stage of exponential ascent. Fifty years ago, that was where the U.S. stood. Today, Beijing is building ports, highways, and digital infrastructure across Asia, Africa, and Latin America. The Belt and Road isn't just a slogan, it's a full-blown strategy. And then there's the United States, where Trump and company are reorganizing America around economic firepower: tariffs, crypto regulation, manufacturing repatriation, and an unapologetic 'America First' doctrine that still shapes global markets. Everywhere you look, countries are making bold, strategic moves to secure their place in the 21st century. Jordan, too, has begun to stir. In Aqaba, strategic partnerships with Abu Dhabi are being revived. Marsa Zayed is back on the radar. Major tenders are being issued for logistics, energy, and infrastructure. It seems like every month ADC and ASEZA are making announcements or decisions that are meant to attract foreign investments. In Tafilah, the government just announced extraordinary investment incentives including 50% discounts on land, and free electricity for three years to new investors. But let's be clear: these are early signals. What Jordan needs now is a full-throttle pivot. It's time for Jordan to make power plays. Jordan doesn't need to imitate the Gulf or any other '2030 vision' for that matter. Jordan needs to chart its own course; one that is smart, self-reliant, and future-proof. There's never going to be a better time for a bold power move; revolutionary even. Jordan must conceptualize, create and implement a plan that turns its problems into opportunities. For instance, Southern Jordan is ideal for large-scale data centers since there is a stable geology, low humidity, affordable land and an abundance of sunlight year-round for energy requirements. Also, AI training and coding academies should become national priorities, turning youth into creative digital talent ready to export tools and apps for the rest of the world to use. Jordan must utilize all these ideas to build around existing platforms, such as the submarine fiber optic cables that are an integral part of the global internet backbone. The Jordanian government is already offering incentives in different economic zones around the kingdom, but now is the time to scale up. There must be incentives on a scale big enough to attract global giants like Google and NVIDIA to come over and form strategic partnerships with the private sector in Jordan- and this needs to be facilitated by the government. Will Jordan remain risk-averse and dependent? Or will it take its place among the daring? Jordan has a young, talented population. A strategic location. Political stability in a region addicted to chaos. The only things missing are scale, and the courage to chase it. Let Jordan industrialize. Let Jordan digitize. Let Jordan empower its youth, not with slogans or public-sector wages, but with private-sector salaries befitting of their talents.
