According to the Financial Times, Builder.ai, a British AI unicorn company supported by Microsoft Amazon and others, discovered financial and marketing frauds in internal investigations, which led to a significant drop in expected revenues to a quarter of the previous data and declared bankruptcy.
Builder.ai, the largest AI start-up company in the United Kingdom, which valued more than $1 billion, was funded by more than $500 million in well-known investment institutions, such as Microsoft, Soft Silver and the Qatar Sovereign Wealth Fund, and has now been identified as entering the liquidation phase. The company spokesperson stated that the assets on the Builder.ai account were no longer sufficient to cover staff salaries and other operating costs, and that the breakdown of the financial chain triggered a breach of contract by the lenders.
According to information sources, the lenders acted quickly after Builder.ai submitted an interim financial report to the auditing body (the estimate of prior-period revenues was significantly reduced). According to the financial statements, the projected income of Builder.ai for 2024 was revised from $220 million to $55 million, and total reported sales for 2023 were restated from $180 million to $45 million.
These pre-receiving data were submitted to the Board of Directors under the leadership of Sachin Dev Duggal, founder and Chief Executive Officer of Builder.ai. Duggal left office with Varghese Cherian, Chief Receiving Officer, in February of this year, but the former retains the seat on the Board and the title “wizard”. According to the source, Duggal had a long-standing accounting problem prior to its departure.
In the past few months, Builder.ai has experienced significant leadership changes and financial problems. In February 2025, Manpreet Ratia succeeded Duggal as the new CEO. The long-suspicious accounts raised concerns about the company ‘ s financial situation and prompted the board of directors and new management to commission an internal investigation to a law firm.
According to inside sources, the results of the investigation were reported last week to senior companies and other stakeholders, with serious doubts as to the authenticity of previously recorded receipts. The financial reports contain a large number of long-outstanding “receivables” suspected of being a fictional transaction, in particular with respect to the authenticity of the Middle East broker Resellers.
According to the law firm, there was a deliberate overestimation of the company ‘ s revenues in Builder.ai, which was overestimated by 300 per cent during Duggal ‘ s service. At present, Sachin Dev Duggal faces multiple charges of obtaining financing through false marketing, suspected of transferring company assets, etc.
Builder.ai was created by Sachin Dev Duggal in 2016 and originally named Engineering.ai, changed name in 2019. Sachin Dev Duggal promised to simplify the development of the application through AI technology, “simply building an app or website as simple as a piece of pizza”. It attracted the preference of Microsoft, the Qatar Sovereign Wealth Fund and, once over $1.5 billion, the well-deserved British AI unicorn in 2023.
But what Builder.ai promised was a false image of Duggal. The company’s declared use of “artificial intelligence” to automate the development of applications, with only artificial intelligence and a large number of Indian programmers working behind it. Long-term contracts, which could not be recovered, and unverifiable bills of Middle Eastern middlemen were covered up in the amazing financial reports.
As early as 2019, the Wall Street Journal revealed problems within Builder.ai. At that time, Builder.ai, also known as Engineering.ai, several current and former employees stated that the company overstated its artificial intelligence technology to attract customers and investors. They claimed that the company lacked the technology to deal with the natural language and that the solutions used internally could not be called AI.
As the situation became increasingly uncomfortable, investors began to “run”. As previously reported by the Financial Times, the company borrowed $50 million from the Science and Technology Credit Consortium in October 2024, which seized its $37 million cash reserve this month to trigger insolvency proceedings. According to the source, the credit consortium is led by Viola Credit, Atempo Growth and Cadma Capital Partners, supported by private capital Apollo Global Management.
According to the Builder.ai statement: “After the team’s tireless efforts to explore all the feasibility options, the company has not been able to recover from this historic challenge and past decision-making, and various factors have put enormous pressure on the company’s finances. It is imperative to support our staff, clients and partners through this difficult period. We will work closely with the designated custodian to ensure that the process is carried out in an orderly manner and, where possible, to explore all feasible options for some operations.”
According to Manpreet Ratia, who had just taken over the mess, there was only $5 million left in the company ‘ s accounts and not enough to pay for its employees. At present, Builder.ai refuses to comment, stating that “the liquidation is being carried out in an orderly manner and that every effort is being made to safeguard the rights and interests of employees”.
