An AI company has been exposed for faking its technology by secretly employing over 700 Indian engineers instead of using actual artificial intelligence. Builder.ai had claimed to use AI to build apps through its virtual assistant, Natasha, and to design, code, and deliver apps in record time using cutting-edge AI.

 

The London-based startup gained major attention after Microsoft reportedly invested $455 million, pushing its valuation to a massive $1.5 billion. However, recent reports have revealed that the supposed "neural network" was just a team of human workers doing the job behind the scenes.

 

According to Binance, the majority of the work was handled manually by engineers, with only basic software tools being used for clerical tasks. The scam continued for eight years before being exposed in May 2025. Builder.ai soon declared bankruptcy and announced on LinkedIn that it would be "entering into insolvency proceedings."

 

The company wrote, "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."

 

Bloomberg reported that Builder.ai had also partnered with Indian social media startup VerSe to fake its sales numbers. Between 2021 and 2024, both companies billed each other large amounts, even though no real services were provided.

 

VerSe strongly denied the accusations. Co-founder Umang Bedi told Bloomberg, "We're not the kind of company that is in the business of inflating revenues," calling the claims "baseless and false."

 

As the story went viral on social media, another company, Builder.io, got caught in the drama due to a similar name. Builder.io, which also works with AI-powered app development, had to clarify online that they have no connection to the now-bankrupt Builder.ai, and their hilarious response is getting a lot of attention online.