Unveiling the Tactics of a Billion-Dollar London Startup: How Microsoft’s Backed Venture Used 700 Indian Engineers to Simulate AI

Builder.ai, a London-based startup once valued at $1.5 billion and backed by Microsoft and Qatar’s sovereign wealth fund, has filed for bankruptcy. The company marketed its app development platform as “AI-powered,” but investigations revealed that around 700 Indian engineers were manually coding applications, rather than using artificial intelligence. Despite its claims, Builder.ai failed to deliver on promised revenues, inflating its 2024 projections by 300%, which led to lender Viola Credit seizing $37 million in May 2025. Founder Sachin Dev Duggal promised $220 million in sales, but an audit revealed only $50 million. Previous reports since 2019 highlighted the reliance on human labor, prompting a lawsuit from a former employee alleging deception. The company’s collapse underscores issues of “AI washing,” where traditional services are misrepresented as cutting-edge technology to attract investments. Following the bankruptcy, 1,000 employees lost their jobs, and the company owes substantial debts to major cloud service providers.

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