Microsoft-Backed “AI” Was Actually 700 Indian Workers

A London artificial intelligence startup valued at $1.5 billion filed for bankruptcy because its “AI” services were actually operated by 700 human engineers in India.

The London-based startup Builder.ai received backing from Microsoft and other major investors to market its platform, Natasha, which promised to create apps through artificial intelligence capabilities—starting from design all the way to coding.

A Binance report revealed that most labor at Builder.ai involved human work, while some clerical tasks were performed through general software.

😃 The Natasha neural network turned out to be 700 Indian programmers

The startup BuilderAI offered to write any application, like in a constructor, by selecting the necessary functions.

In reality, customer requests were sent to the Indian office, where 700 Indians wrote code… pic.twitter.com/lYWipf63cp

— Bernhard Engelbrecht (@BernhardEngel_) May 29, 2025

The scandal came to light in May 2025, ending an eight-year run. Dexerto reports that the company wrote in a statement on LinkedIn: “Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position.”

Builder.ai also faces serious allegations of financial misconduct. Bloomberg reported that it faked transactions with Indian tech firm VerSe Innovation to inflate its revenue—a practice known as “round-tripping.” Documents showed both companies billed each other for similar amounts between 2021 and 2024, often without providing services.

VerSe has strongly denied the claims. “We’re not the kind of company that is in the business of inflating revenues,” co-founder Umang Bedi told Bloomberg, calling the accusations “baseless and false.”

Builder.ai’s downfall highlights the risks of the current AI investment boom, where startups promise revolutionary products but sometimes rely on smoke and mirrors.

Dexerto notes that U.S. prosecutors have subpoenaed Builder.ai’s financial documents, and the company has admitted to some discrepancies in its past sales reports.

Dexerto reports that even unrelated firms are feeling the heat. Builder.io, which is not affiliated with Builder.ai, has had to publicly distance itself after being caught in the social media backlash.