Builder.ai got exposed. The startup claimed its AI assistant, Natasha, builds apps automatically. The truth? 700 engineers in India were pretending to be Natasha, chatting with clients and actually coding the apps.
The issue started when a lender seized $37 million after digging into Builder.ai’s financial claims. The company said it made $220 million, but real revenue was just $50 million — less than a quarter of that.
Linas Beliūnas of Zero Hash called out Builder.ai for fraud in a LinkedIn post: 
It turns out the company had no AI and instead was just a group of Indian developers pretending to write code as AI.
A former employee filed a lawsuit. An audit uncovered millions in unpaid bills. Builder.ai now owes Amazon $85 million and Microsoft $30 million for unpaid cloud services.
The startup has filed for bankruptcy in the UK, India, and the U.S. On LinkedIn, Builder.ai said:
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.
This case is a textbook example of "AI-washing" — selling a human-driven process as AI-powered tech. It’s a growing problem as companies rush to slap AI labels on products.
According to the Pew Research Center, 43% of people worry AI will harm them, while only 24% think it will help. Half prefer real humans over AI chatbots, highlighting the public’s distrust amid all the AI hype.
