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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'?

#212

Post by dang »

Two claims are being made here, one boring and one lurid.

The boring claim is that the company inflated its sales through a round-tripping scheme: https://www.bloomberg.com/news/articles/2025-05-30/builder-a... (https://archive.ph/1oyOw). That's consistent with other recent reporting (e.g. https://news.ycombinator.com/item?id=44080640)

The lurid claim is that the company's AI product was actually "Indians pretending to be bots". From skimming the OP and https://timesofindia.indiatimes.com/technology/tech-news/how..., the only citation seems to be this self-promotional LinkedIn post: https://www.linkedin.com/feed/update/urn:li:activity:7334521... (https://web.archive.org/web/20250602211336/https://www.linke...).

Does anybody know of other evidence? If not, then it looks bogus, a case of "il faudrait l'inventer" which got traction by piggybacking on an old-fashioned fraud story.

To sum up: the substantiated claim is boring and the lurid claim is unsubstantiated. When have we ever seen that before? And why did I waste half an hour on this?

(Thanks to rafram and sva_ for the links in https://news.ycombinator.com/item?id=44172409 and https://news.ycombinator.com/item?id=44175373.)

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

#213

Post by dang »

rafram wrote: post #7

Article from a slightly better source: https://timesofindia.indiatimes.com/technology/tech-news/how...

Thanks! It took an annoying amount of time to try to sort this out, but I made a consolidated reply here: https://news.ycombinator.com/item?id=44176241.

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

#214

Post by dang »

sva_ wrote: post #168
rafram wrote: post #7

Article from a slightly better source: https://timesofindia.indiatimes.com/technology/tech-news/how...

Also https://www.bloomberg.com/news/articles/2025-05-30/builder-a...

Thanks as well! More at https://news.ycombinator.com/item?id=44176241.

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

#215

Post by pyman »

dang wrote: post #212

Two claims are being made here, one boring and one lurid. The boring claim is that the company inflated its sales through a round-tripping scheme: https://www.bloomberg.com/news/articles/2025-05-30/builder-a... ( https://archive.ph/1oyOw ). That's consistent with other recent reporting (e.g. https://news.ycombinator.com/item?id=44080640 ) The lurid claim is that the company's AI product was actually "Indians pretendi…

I couldn't find any reference on the BuilderAI website claiming they use GenAI to build software. So the second claim lacks evidence.

Update: They mention AI to assemble features, not to generate code. So it's impossible to know whether they were actually using ML (traditional AI) to resolve dependencies and pull packages from a repo.

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

#216

Post by lotsofpulp »

mistercheph wrote: post #195
pyman wrote: post #187

Earlier quoted context omitted.

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…

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…

>Arguably, Theranos was also somewhere in a gray area between marketing and fraud.

Theranos was clear fraud. She claimed scientific advances that did not exist.

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

#217

Post by pyman »

aprilthird2021 wrote: post #203
pyman wrote: post #187

Earlier quoted context omitted.

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

Just to play the devil's advocate: if a software company tells you your data is secure and then someone hacks their server and steals your photos and personal data, did their CEO and marketing department oversell their level of security? Is this fraud as well?

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

#219

Post by ivape »

dang wrote: post #212

Two claims are being made here, one boring and one lurid. The boring claim is that the company inflated its sales through a round-tripping scheme: https://www.bloomberg.com/news/articles/2025-05-30/builder-a... ( https://archive.ph/1oyOw ). That's consistent with other recent reporting (e.g. https://news.ycombinator.com/item?id=44080640 ) The lurid claim is that the company's AI product was actually "Indians pretendi…

Speculating, don’t they offer dev services that’s supposed to be done by AI? If the dev services were offered by devs, then that would be the scam. Now that I’ve said the second part, it does seem lurid because who the hell is paying for AI first code deliverables.

—-

Message to HN:

Instead of founding yet another startup, please build the next Tech Vice News and fucking goto the far corners of the tech world like Shane Smith did with North Korea with a camera. I promise to be a founding subscriber at whatever price you got.

Things you’ll need:

1) Credentialed Ivy League grad. Make sure they are sporadic like that WeWork asshole.

2) Ex VC who exudes wealth with every footstep he/she takes

3) The camera

4) And as HBO Silicon Valley suggests, the exact same combination of white guy, Indian guy, Chinese guy to flesh out the rest of the team.

See, I need to know what’s it like working for a scrum master in Tencent for example during crunch time. Also, whatever the fuck goes on inside a DeFi company in executive meetings. And of course, find the next Builder.ai, or at least the Microsoft funding round discussions. We’ve yet to even get a camera inside those Arab money meetings where Sam Altman begs for a trillion dollars. We shouldn’t live without such journalism.

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