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Builder.ai Files for Bankruptcy After ‘AI’ Disguise Unravels

Microsoft among investors now facing creditor claims following fraud allegations from US regulators; UK authorities have opened similar probes.

Two men looking at a computer screen with code on it.
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Image
A screenshot of the CEO and co-founder of Builder.io, Steve Sewell.

Overview

  • Builder.ai filed for bankruptcy this week in five jurisdictions after lender Viola Credit seized $37 million over inflated revenue projections.
  • The London startup had secured over $445 million from investors including Microsoft and the Qatar Investment Authority by marketing its ‘Natasha’ assistant as an AI-driven development tool.
  • An independent audit revealed its 2024 revenue was $50 million, far below the $220 million figure promised to creditors.
  • US prosecutors in New York and UK regulators have demanded Builder.ai’s financial statements and customer lists as part of widening fraud investigations.
  • Internal records show ‘Natasha’ was a front for around 700 engineers in India who manually coded applications, echoing concerns raised by a 2019 Wall Street Journal exposé.