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Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

ibtimes.co.uk

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Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#201

Post by aprilthird2021 »

moonikakiss wrote: post #200

I did due-diligence on Builder.AI for a venture firm I was interning at (circa 2019). It was extremely apparent (Glassdoor, talking to any employee) it was complete BS. When I say apparent, it took less than 15 minutes and a couple of google searches to get a sniff of it. Somehow, you can still raise $500MM ++. I think about that a lot

You have to elaborate! What were the signs? When you did due diligence what were you told about the company? Was the marketing or premise itself fishy or you only realized it was fraudulent after starting the due diligence?

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#202

Post by [deleted] »

Retric wrote: post #198
pyman wrote: post #196

Earlier quoted context omitted.

Theranos was dealing with people's health. Misdiagnoses, delayed treatments, etc, that's real harm. Imo, comparing that to building web apps isn't the same.

Theranos was using the same testing equipment and techniques as any other lab for most of their diagnostic services. Which is how they avoided being instantly exposed when their results ended up being meaningless. “In October 2015, John Carreyrou of The Wall Street Journal reported that Theranos was using traditional blood testing machines instead of the company's Edison devices to run its tests, and that the company…

[deleted]

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#203

Post by aprilthird2021 »

pyman wrote: post #187
bartread wrote: post #167

Earlier quoted context omitted.

> This is fake news. Builder.ai, like any other dev shop, had clients and was building apps using developers in India, pretty much like Infosys or any other Indian dev shop. Nothing wrong with that. Yeeeah... that's a fairly disingenuous take. The difference between every other offshore dev shop backed by developers in India and Builder.ai is that - and I say this as someone who thinks Infosys is a shit company - Inf…

I don't agree. Even Infosys markets AI as part of their offering, just look at their "AI for Infrastructure" pitch: https://www.infosys.com/services/cloud-cobalt/offerings/ai-i... Every big dev shop does this. Overselling tech happens all the time in this space. The line between marketing and misleading isn't always so clear. The difference is Builder.ai pushed the AI angle harder, but that doesn't make it Theranos-l…

> Overselling tech happens all the time in this space.

Overselling is fraud and is a crime at a certain point, which they clearly passed otherwise they wouldn't have had their lenders pull back money and leave them bankrupt

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#204

Post by aprilthird2021 »

pyman wrote: post #196
mistercheph wrote: post #195

Earlier quoted context omitted.

Arguably, Theranos was also somewhere in a gray area between marketing and fraud. Everyone in the industry incentivizes and participates in this behavior, but once in a while, let's grab a few stand-out individuals to scapegoat once in a while for all the harm caused by/to the entire group with this behavior. Make sure you pick someone big/ugly enough to be credibly dangerous to the whole group, but who isn't too dan…

Theranos was dealing with people's health. Misdiagnoses, delayed treatments, etc, that's real harm. Imo, comparing that to building web apps isn't the same.

The actual crime Theranos founder went to jail for was not misdiagnosing people. It was defrauding investors because they made them believe their machines were doing the tests when really they were sending them out to separate labs

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#205

Post by MangoToupe »

Aurornis wrote: post #143
spwa4 wrote: post #115

Earlier quoted context omitted.

... and what if Twitter does it? Because at the very least they killed most countermeasures to bots and a serious percentage of activity on twitter is "fake engagement". I also have a much more difficult question: Could you explain how this fraud works/applies if nation states are the ones developing the bots? Is there a difference between foreign and US bots?

It's not complicated. If a company knowingly misrepresents their user activity then it's fraud. Knowing that a significant portion of your user activity is bots but then claiming you don't have bots would be fraud.

> If a company knowingly misrepresents their user activity then it's fraud.

Demonstrating this in court might get pretty complicated, though. Legal terms often have a way of obscuring the complexity of real life (which is understandable, of course).

I'm guessing the number of well-known startups who have committed fraud by "faking it until they make it" is somewhere between 1 and N. What that number is might well be subjective to the judge or jury rendering a verdict. Unfortunately, lack of serious insight into this might also be evidence that "faking it until you make it" works even if it's fraud, so long as you can spin revenue that investors demand out of it eventually.

Edit: forgive my claiming lack of evidence = evidence; i'm just tired. I think my point that it's kind of unknowable, and this might prompt people to accept it as proof positive (even irrationally). I hope my comment can be received in good faith

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#206

Post by aprilthird2021 »

casion wrote: post #134
CSMastermind wrote: post #128

Earlier quoted context omitted.

How do you figure? $450M / 8 years / 700 developers = $80k / year per developer.

Average salary for a developer in India is about 1/10th of that.

No, it's not

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#207

Post by aylmao »

pyman wrote: post #187
bartread wrote: post #167

Earlier quoted context omitted.

> This is fake news. Builder.ai, like any other dev shop, had clients and was building apps using developers in India, pretty much like Infosys or any other Indian dev shop. Nothing wrong with that. Yeeeah... that's a fairly disingenuous take. The difference between every other offshore dev shop backed by developers in India and Builder.ai is that - and I say this as someone who thinks Infosys is a shit company - Inf…

I don't agree. Even Infosys markets AI as part of their offering, just look at their "AI for Infrastructure" pitch: https://www.infosys.com/services/cloud-cobalt/offerings/ai-i... Every big dev shop does this. Overselling tech happens all the time in this space. The line between marketing and misleading isn't always so clear. The difference is Builder.ai pushed the AI angle harder, but that doesn't make it Theranos-l…

> The line between marketing and misleading isn't always so clear.

In the general I kind of disagree with this. I am not a lawyer, so I don't know all the details, but if you look for it, you should be able to find the line since it's generally illegal to mislead customers. There's also a whole set of contractural and perhaps even legal obligations when it comes to investors.

For contracts and the law to be enforceable, they need draw lines as clearly as possible. There's always some amount of details that are up to interpretation, but companies make sure to pay legal counsel to make sure they don't cross these lines.

Now, specifically in this case, I do agree with you. This case doesn't seem to be a legal matter of customer or investor misleadings (thus far). Viola Credit did seize $37 million, so IMO there clearly was a violation of contract in all this, but it seems like that had nothing to do with the whole AI overselling.

Re: Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'?

#210

Post by pyman »

aprilthird2021 wrote: post #204
pyman wrote: post #196

Earlier quoted context omitted.

Theranos was dealing with people's health. Misdiagnoses, delayed treatments, etc, that's real harm. Imo, comparing that to building web apps isn't the same.

The actual crime Theranos founder went to jail for was not misdiagnosing people. It was defrauding investors because they made them believe their machines were doing the tests when really they were sending them out to separate labs

Completely different story. With Theranos the investors sued the founders, with Builder AI they didn't. This suggests they knew what was really going on, so it wasn't fraud in their eyes.
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