Following the public reporting timeline of builder.ai lays out a fascinating story akin to Theranos or Wework. I'm sure we'll get an exhaustive account of exactly what happen in due course, and there will likely be other such cases that come out of the most recent AI investing boom.
Aug 2019 - WSJ report that for builder.ai the "AI" means "Actually people in India"
https://www.wsj.com/articles/ai-startup-boom-raises-question...
FT pick up the trail over a year ago with a series of reports:
Mar 2024 - Men behind builder.ai named in criminal probe
https://www.ft.com/content/7ff3c5fc-e390-4ca8-9c7d-11fd56ab7...
Mar 2024 - The wild ride of a Microsoft-backed tech unicorn
This is a full detailed profile of the CEO and the company detailing their wild spending and fundraising details:
https://www.ft.com/content/11afc46c-b435-489d-a9f1-134ad0c00...
It all falls apart after that report:
May 2024 - CEO steps down
https://www.ft.com/content/f8882c90-ef69-4a62-aecf-9d3725aca...
May 2024 - builder.ai finds auditor had links to previous CEO:
https://www.ft.com/content/26c98590-e8f9-4cd9-83d6-db0d25ad2...
Apr 2025 - builder.ai restates revenues and hires outside auditors to investigate inflated sales
https://www.bloomberg.com/news/articles/2025-03-31/microsoft...
and this week they folded. The website was up 48 hours ago last I checked, but has now been taken down.
We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.
From earlier this year:
> A partner at accounting firm PKF Littlejohn signed off the UK accounts of the artificial intelligence start-up, despite having previously served as a director of another company also set up by Builder.ai’s founder, Sachin Dev Duggal, according to a review of hundreds of filings analysed by the Financial Times.
Absolutely baffles me how you can blow $500m on a website builder without anyone noticing.
What the hell happened? Unless it was an actual defrauding of investors, but how were the investors so stupid?
Even a financially responsible (and I’m not suggesting Builder.ai is one of these) company in the AI space is going to be significantly more capital intensive than your typical SaaS startup, and I suspect are fundamentally more challenging to operate.
Look at all the great unsustainable AI applications we're never going to be able to use.
I think the big and juicy AI applications are just so that GPUs can go brrrr[1]. Just gimmicks.
Real and useful applications will come from SLM that can be run on SoC like phones or Raspberry PIs and LLMs optimized to run on consumer grade hardware like the 3060s, not with those models that require multimillion dollar setups to be able to run.
It is dissapointing to see how frequently VCs invest hundreds of millions of dollars into fraudulent companies. This is very different from investing in legit companies that don't work.
It often seems like you are more likely to raise VC by being a fraud than by being a responsible person who wants to do something positive in this world.
The ironic thing is, if Builder.ai were a younger company, they might have been a success through the unorthodox expedient of actually using AI for real. Maybe they were forward-looking -- we had "machine learning" then that was making some inroads -- but when you use foresight to make more plausible what is still a fraud today, it's ... well, still a fraud. Someone will build Theranos's mythical diagnostic robot someday too, doesn't mean it isn't fiction now.
Read about so many companies here in the UK that setup, claim huge success, max out loans and debts, then either fold/disappear or float on fraudulently inflated share prices, owner sells all their shares, then the company share price crashes. Happens all the time now, sadly, since the UK's welcome doors opened wide. This system runs deep here, laundering with barber shops, american candy stores, made up corporations, crypto fraud, carousel fraud, corporate fraud. It makes me sad, because I know I will never get a chance to build a business successfully and honestly here after all this damage is done.
Builder.ai was then able to raise $75mn from some of its existing shareholders to try to fix its balance sheet, according to two people familiar with its finances.
The UK has cemented its place in tech as the land without Sarbanes-Oxley.
Until clawbacks as strict banishment enforcement from the ability to serve in corporate governance roles, it’s rather depressing to catch up after the fact and realize there’s nothing particularly stopping these bad actors individuals from profiting and potentially moving on to another shaky, at best, enterprise courting suckers…I mean, investors.
The entire company and its $500M has been "deleted" [0] over fraud and cooking their books.
A great candidate for the Theranos of AI, even with Microsoft involved as an investor.
We'll see a new wave of fraud(stars) being exposed out of this AI hype.
Hmmm...criminal CEO plus no product that people need. Who would have guessed this outcome?
> The company’s founder Sachin Dev Duggal stepped down as chief executive earlier this year but retained his board position and title of “chief wizard”.
If only there were some signal in the behaviour of a person who calls themselves “chief wizard” that might suggest they were prone to making poor quality business decisions.
For real: this is not a job title that would be adopted by a “serious person” - a real expert, with real insight, and a real plan to deliver. Why have investors given his company tens of millions of dollars?
I get that investors are looking for that 10x return and are ready for some failures along the way but that mindset seems to be used as cover for a lot of dumb money. Whereas the reality is that VCs and corporate backers would enjoy much better returns if they simply avoided the most obvious grifters.
People who can’t answer specific questions about delivery with concrete answers - Elizabeth Holmes, the WeWork clown, this guy, and on and on - should be avoided. And especially if they have dumb job titles.
> The company’s founder Sachin Dev Duggal (...) retained his board position and title of “chief wizard”.
Flash of the Silicon Valley show.
I’m not sure what happened there but I’ve both experienced and seen so many startups where their initial leadership was great, then VC gets involved and completely destroys the long term trajectory of the company in exchange for short term growth.
I genuinely think twitter and LinkedIn has ruined the brains of founders who follow fads after losing the goals and visions they had when they first started.
Why is this a big news, didn't we already learn that most startups/companies fail and investors are just betting to find their next unicorn?
contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on
Do we need law to keep wages in escrow, including notice periods.
Well that investor list reads like a who’s who of dumb money…
the first domino has fallen, the rest of the industry to follow?
Big tech then swoops in and buys up any _worthwhile_ startup for cheap and consolidation of power continues for tech.
That TLD is no guarantee for success.
https://archive.ph/T5ean