Builder.ai: The Biggest Artificial Intelligence Scam Ever (For Now)

They Said It Was Artificial Intelligence, But It Was Indian Developers!

ChatGPT entered our lives at the end of 2022. Before that, artificial intelligence was only interesting to so-called "nerdy" people. But after that day, it became part of all our lives. Some of us lost our jobs because of AI, some of us found new job opportunities thanks to it. But some people benefited from this technological revolution in much more “creative” ways. Today’s story is about Builder.ai, which is now seen as the biggest fraud in AI history.

Beginning: The Days When Coding Was Compared to Pizza

Builder.ai was founded in 2016 by Sachin Dev Dugal in London as a startup called Engineer.ai. Its mission was to make software development simpler and more open to everyone. Dugal liked to explain software as ordering pizza.Simple and fast!

According to his claim, thanks to their revolutionary AI model, software development would be both cheap and fast. With this story, he made his company look much stronger to potential customers and investors. In presentations, he even said that 80% of the apps were coded by AI. At first, convincing customers who only cared about results, not the developers, was enough — and he did that well.

SoftBank Joins the Story

After gaining enough customer attention, Dugal arranged a meeting with SoftBank.
(As some may know, SoftBank’s founder Masayoshi Son invests by gut feeling — especially when there’s “AI” involved, it gets serious.) The presentation worked:
They secured a $29.5 million Series A investment.

In the startup world, value is usually based on growth speed, not profit. Dugal knew this. That’s why, instead of a steady but “boring” path, he aimed for rocket-speed growth that would excite investors.

Discussions, Rumors, and a Name Change

In 2019, a Wall Street Journal article titled: “AI startup boom raises questions about exaggerated tech savvy” said that Engineer.ai was overstating its AI abilities. At the same time, the number of employees had jumped from 32,000 to 75,000 in one year, which raised questions like: “If the AI is this advanced, why are so many engineers needed?”

After these criticisms, Dugal changed the company’s name to Builder.ai. The goal was to refresh the image, but inside the company, nothing changed. The criticisms were ignored.

Investments Continue: Pizza + Lego + AI

Despite all the negative news, Builder.ai continued to promote the dream of building software with AI. By 2023, it was announced that they had $180 million in sales and over $400 million in total investment. Microsoft, Qatar Investment Authority, IFC, and of course SoftBank were the biggest names.

Dugal wanted to be called “chief wizard”,and he answered technical questions with examples like making pizza, Lego toys, or riding a bike. The company’s value reached $1.5 billion, and it was shown as one of the most promising AI startups.

Investigations & Money Laundering Claims

In November 2024, Builder.ai came under investigation in India for suspected money laundering. It was claimed that their value growth was exaggerated by 300% to attract investment. They also faked purchases and invoices to inflate revenue.

More interestingly, after July 2024, the company was operating without a CFO.
Friends of Dugal’s consulting firms acted as CFO, covering up accounting tricks. In reality, there was no real economic value creation. They were just pretending.

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In March 2025, Dugal resigned as CEO. The new CEO, Manited Ratia, soon discovered the truth. The $220 million revenue claimed for 2024 was actually only $50 million, and there was less than $5 million in the bank. Builder.ai stopped operations and fired 1,000 people. Worse still: the company’s software development, which was said to be 80% automated, was actually done manually by more than 700 Indian engineers. These engineers worked under a company named Versie,
which was also part of the fraud plan.

What’s the Situation Today?

Builder.ai is now near bankruptcy, worthless and in deep debt. But Dugal still acts like nothing happened.The real cost was paid by the employees.

Conclusion: Bubbles and Truth

We are right in the middle of the AI era. But just like the Dotcom bubble of the 2000s,
AI startups also have a high risk of exaggeration and manipulation. It’s critical to focus not just on promises, but on real operations. Builder.ai’s story will remain as a warning for investors,and a black mark for the industry. The real AI miracle is still hidden in the code. But fraud has already been “generated.”

Which company do you think will be the next bubble?
I’m curious about your thoughts…

See you in the next post.