A London-based AI startup, Builder.ai, valued at $1.5 billion and backed by Microsoft, has filed for bankruptcy after it was revealed that its claimed AI-powered app development platform was actually driven by over 700 Indian engineers manually coding the applications.
The company, which marketed its “Natasha” neural network as an AI solution for building apps, was exposed for relying on human labor instead of artificial intelligence. The unraveling began when creditor Viola Credit seized $37 million from Builder.ai’s accounts after a loan default in 2023.
Additionally, Bloomberg investigations uncovered questionable financial practices involving inflated sales through transactions with Indian social media startup VerSe Innovation. This deception, which persisted for eight years, led to the company’s rapid collapse in May 2025.
The scam has sparked discussions about morality of AI programs. Besides fake programming, biased outputs and answers are of great concern for people. Whether there will be measures against immoral AI is being discussed in IT realm nowadays.
