Indian AI unicorn Builder.AI has dramatically collapsed, laying off its entire workforce and entering insolvency proceedings. Once valued at $1.5 billion and having raised over $500 million from major investors like Microsoft, SoftBank, and the Qatar Investment Authority, the startup’s core AI technology was reportedly a facade.
Founded in 2016, Builder.AI promised to simplify app development to the ease of “ordering pizza.” Led by India’s AI figurehead Sachin Dev Duggal—who gave himself the quirky title “Chief Wizard”—the company attracted nearly half a billion dollars in funding from top global tech investors.
The AI Illusion
Reports reveal that Builder.AI’s claimed AI backend was actually a team of human developers manually coding behind the scenes. According to multiple sources, key pricing and scheduling functions were managed by traditional software, but most work was done manually by employees. Duggal is also accused of exaggerating revenue figures by 300%, with an internal audit showing actual revenue of just $55 million versus the claimed $220 million.
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Downfall and Insolvency
The crisis escalated when creditor Viola Credit, which loaned Builder.AI $50 million in 2023, seized $37 million from company accounts. With only $5 million left—restricted due to regulations—the startup could not cover payroll. On May 21, 2025, Builder.AI publicly announced its insolvency, citing “historic challenges and past decisions” that severely strained its finances.
Legal Issues and Leadership Changes
Compounding the company’s troubles, Duggal faces a money laundering investigation in India, while co-founder Saurabh Dhoot is implicated in a loan fraud case. Duggal resigned as CEO in February 2025, replaced by Manpreet Ratia tasked with managing the fallout, though Duggal retained the “Chief Wizard” title until the end.
The collapse of Builder.AI stands as one of the largest failures in the AI startup space, highlighting the risks and deceptions amid the AI investment boom.
