Builder.ai, once a promising unicorn startup surpassing $1 billion in valuation with investment from Microsoft and Qatar Investment Authority, has astonishingly collapsed. The firm undergoing bankruptcy proceedings claimed to build disruptive AI technologies for app development, only to be exposed for having a legion of engineers masquerading as AI. This scandal is yet another thread in the ongoing character assassination of artificial intelligence claims in the already suspicious tech world.
The ‘Aixcircle’ Revelation
The main focus of the scandal revolves on Builder.ai’s scooped proprietary software ‘aixircle’ which they pitched as an AI solution for block-style app development. Investigations revealed the shocking truth wherein almost 700 engineers based in India impersonated AI systems; the software operated manually and was highly algorithmic. This ruse significantly advanced the company’s technological prospects for years.
Financial Irregularities and Bankruptcy
The unscrupulous ‘aixcircle‘ mask revelation synchronized with major financial blunders within Builder.ai. Defaulting on major debts such as $85 million to Amazon, and $30 million to Microsoft, the company entered bankruptcy proceedings. After an internal audit, questionable accounting procedures alongside overestimated revenue claimed to restate 2023 revenues to $140 million turned out to incur a revenue and forecasting slash of 25% for 2024.
Leadership Crisis and Legal Issues
Founder Sachin Dev Duggal stepped down from the role of CEO in February 2025, relinquishing his position to accept that of ‘chief wizard while Manpreet Ratia took over the reins. Duggal started facing legal issues, such as being placed as a suspect for a money laundering case in connection with Indian Conglomerate”’s Videocon account”.’ Duggal has claimed innocence, but court filings suggest the Enforcement Directorate is investigating some of his homegrown companies’ transactions.
Disappointed Employees and Clients
A number of ex-employees and clients from the company provide testimony of a steep culture gap the company has promoted, with claimed company promises remaining largely unfulfilled. Alleged employee exploitation through unpaid overtime and disproportionate pay cuts, coupled with clients not receiving projects completed on time or up to expectations ai the company marketed claimed to AI also added to the dissatisfaction reports.
These preliminary attempts have come to naught.
Duggal, as afflicted as the rest, is reported to be trying to reclaim Builder.ai or its assets through an initial Builder.ai exited stage left through pre-packaged insolvency. This would take an upfront investment of $10 million. In order for the company to remain operational, an additional $25 million would also be required. Of concern, however, is the fact that the company’s intellectual property is secured to lenders. An internal audit has also revealed suspicious sales figures.
Untangling the Technology Industry
The moral of the Builder.ai story is more about corporate governance and oversight with respect to AI services. If anything, it emphasizes the absence of proper systems in place that vet claim substantiation for “AI” driven solutions. With competitors focusing more on selling AI solutions than providing real value, there’s more work needed from investors, customers and regulators for redemptive change.
Conclusion
Builder.ai epitomizes the incessant buzz around technology capability without restraint fuelled by reckless ethics buzzwords. The positive, misleading facets certainly stand out whereas the negative barely strikes sight. In the aftermath, is a prudent reminder for us all: Embrace reality beyond marketing and place ethics as vanguards of business. As technology continues its spiral to the future, order and trust in innovation will settle through demanding change in words, values upheld and actions taken.
