The company, which attracted $445 million in investments from backers like Microsoft, marketed itself as a groundbreaking no-code solution. Its AI assistant, “Natasha,” was advertised as capable of constructing software with minimal user input—similar to assembling Lego bricks. However, it has become apparent that the platform was essentially a front.
A widely shared post on the social media platform X by Bernhard Engelbrecht, founder of Ebern Finance, alleged that Builder.ai was effectively outsourcing development tasks to around 700 engineers in India. He asserted that customer requests were sent to Indian teams who manually coded the applications, while the company presented the results as AI-generated. Engelbrecht noted that many of these applications were flawed and hard to maintain.
“The whole setup appeared to be genuine AI,” Engelbrecht wrote, “but it wasn’t.”
???? The Natasha neural network turned out to be 700 Indian programmers
The startup BuilderAI offered to write any application, like in a constructor, by selecting the necessary functions.
In reality, customer requests were sent to the Indian office, where 700 Indians wrote code… pic.twitter.com/lYWipf63cp
— Bernhard Engelbrecht (@BernhardEngel_) May 29, 2025
The company’s financial stability plummeted earlier this year after it defaulted on a $50 million loan from Viola Credit. The lender responded by seizing $37 million from Builder.ai’s accounts, leaving the firm unable to meet payroll or sustain its operations. Bloomberg reported that additional funds held in India are currently frozen due to local regulatory issues.
Builder.ai is now undergoing formal insolvency proceedings in the UK, with a court-appointed administrator evaluating what assets can be recovered. In a LinkedIn post, the company stated it was fully cooperating with the administrators and expressed gratitude to its employees and partners for their support. It also acknowledged that previous decisions had pushed it beyond the point of recovery.
This collapse has intensified scrutiny of the AI startup sector, where investor excitement often overshadows technological reality. Phil Brunkard from Info-Tech Research Group remarked to Business Today that many firms in this space expanded too swiftly, lacking robust financial groundwork or genuinely innovative products.
Once viewed as a leader in AI-driven software development, Builder.ai’s failure raises significant concerns about transparency, investor diligence, and the dangers of succumbing to enticing marketing without confirming the underlying truths.
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