Fraud in the world of AI. Programmers from India pretended to be bots
The disclosed fraud led to the fall of Builder.Ai, a company valued at $ 1.5 billion. Instead of artificial intelligence, the code was created in the back of India programmers.
The beginnings of the startup date back to 2016. The creators of the tool called Engineer.Ai promised a revolution in creating web and mobile applications thanks to the use of artificial intelligence algorithms. They compared building programs for “ordering pizza”.
Revolution in creating application. Like “ordering pizza”
The key element of the product was the virtual assistant of “Natasha” generating software using AI algorithms.
The fraud was revealed in the “Times of India” reports. The software was actually generated not by artificial intelligence, but by almost 700 programmers from India hand -coding users. The procedure lasted for 8 years – to be disclosed in May 2025.
In 2019, one of the former employees, Robert Holdheim, sued the company for $ 5 million. The man called Builder.Ai “Pic for water”. The disclosed court documents contained information for investors – the tool creators boasted that the applications were created “in 80 percent”, by AI technology, which “they barely began to develop”.
Financial fraud. Company bankruptcy
The audit from the beginning of 2025 also revealed lies in financial documents – the overstatement of revenues. Builder.Ai reduced the forecasts to 2024 to $ 50 million – from 220. In February there was a change in the CEO position. The founder of Startup Sachin Dev Duggal was replaced by Manpreet Ratia, who discovered manipulations. In May, Viola Credit (the company’s lender) took $ 37 million on Builder.Ai accounts, which did not meet their obligations. This paralyzed the startup.
The US prosecutor’s office is conducting an international investigation. Financial documents and clients’ lists were demanded.
Companies are indebted in Amazon and Microsoft for processing data in the cloud – these obligations exceed $ 115 million. Bankruptcy proceedings were announced in operating countries (including the USA, Great Britain, the United Arab Emirates, India) and about 1,000 employees were dismissed.
The Builder.Ai case circulated world media and noticed the so -called “Ai Washing” – a marketing practice in which companies exaggerate or falsely present the use of artificial intelligence to seem more innovative or technologically advanced than in reality.
