To be fair, Builder.ai had started off with a bang, and a lot of promise. It counted marquee names like Microsoft Corp and the Qatar Investment Authority among its fancied investors. Builder.ai had no problem with accessing funds. In the 8 years since its inception in 2016, it had raised more than $450 million in funding and was already valued in the market at an enterprise valuation of $1.50 billion. All this imploded in mid-2025, as the Builder.AI story went from $1.5 billion to worthless in absolutely no time. But, how exactly did such an implosion happen? 

Builder.ai started with an absolutely compelling proposition; taking AI to the masses in such a way that even those who were non-coders could leverage the power of AI to write code. That is where the first fraud was perpetrated. There was no AI involved, and all the job was being done by a band of low-cost tech programmers based out of India. Unlike what was being sold, it was not any sort of engineering marvel, but a mere sleight of hand. Beyond misrepresenting itself as an AI outfit, Builder.ai also ridiculously inflated revenue estimates to fit its story. 

The problems for Builder.ai began when these overstated sales revenues came home to roost. The company had raised large chunks of capital from VCs and PE financers, showing fancy valuations, that were erroneous in the first place. When one of its lenders, Viola Credit, seized $37 million from the company account, Builder.ai was left with just $5 million in the bank. As funding sources dried up and erstwhile investors abandoned the company, there was no option but to file for insolvency. In short, it was a mix of a liquidity crisis, inflated revenues, and an overenthusiastic investor population who were willing to lap up smart stories. The Greater Fool Theory (GFT) did not help here, as Builder.ai landed in bankruptcy. 

The argument was that by 2028, 60% of all new enterprise apps will be developed using such AI-based platforms like the builder.ai. It is still not clear whether the projection by Gartner would really turn out to be true. The second was the hope that the tipping point for auto–app story would come very soon. It is on this hope that the likes of Microsoft and QIA put in top dollars into the project. However, at the end of the day, it turned out to be pure wishful thinking. AI-based apps is certainly the future, but take a look at the vehicle you are riding on. It surely cannot be a devious entity that lies about its model and artificially inflates sales!