221–230 of 283 posts
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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.
There are always unsolved engineering and scientific challenges that stand between today and future product, and nothing is guaranteed, but you have to sell investors on the future technology (see: frontier model makers pushing AGI/ASI hype)
Obviously there are differences between Toyota's SS battery claims and Theranos' claims, but it's not a black and white line, it's a spectrum.
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> 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?
Kind of like how these guys lied about the volume of sales they had. Textbook fraud. They aren't in trouble for saying "AI is going to be great"
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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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>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.
What about traditional auto manufacturers making claims about solid state battery technology they will achieve in the next decade that they haven't yet? There are always unsolved engineering and scientific challenges that stand between today and future product, and nothing is guaranteed, but you have to sell investors on the future technology (see: frontier model makers pushing AGI/ASI hype) Obviously there are diffe…
Saying "We will have great batteries 10 years from now" is not fraud. It's your belief about the future. Everyone knows no one can predict the future.
Saying "this hydrogen powered truck works, here is a video of it running on the road right now" but the video is edited so you don't see that it's going down hill and the car isn't actually running" that's fraud.
Theranos wasn't in trouble for saying their machines would be great one day. They got in trouble for lying about the current state of things, saying they were performing blood tests on their machines when they were not.
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... 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.
Also a bunch of the bots are by nation states. In that case I would expect that at least some courts would not cooperate with any such fraud case (Russia, India, China, I don't know in Europe but I doubt there aren't a few examples ... and maybe US. Probably at least a few states). Best of luck to make anything stick if the courts to not cooperate.
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 Sh…
My gut feeling is that a lot of people, including developers, are posting hate messages and spreading fake news because of their fear of AI, which they see as a threat to their jobs.
If you look at their website, builder.ai, they tell customers that their virtual assistant, "Natasha", assigns a developer (I assume from India):
> Natasha recommends the best suited developer for your app project, who then customises your code on our virtual desktop. We also use facial recognition to check that the developer working on your code is the same one Natasha picked.
Source: https://www.builder.ai/how-it-works
They also have another page explaining how they use deep learning and transformers for speech-to-text processing. They list a bunch of libraries like MetaPath2Vec, Node2Vec, GraphSage, and Flair:
Source: https://www.builder.ai/under-the-hood
It sounds impressive, but listing libraries doesn't prove they built an actual LLM.
So, the questions that remain unanswered are:
1. Did Craig Saunders, the Head of AI at Builder.ai (and ex-Director of AI at Amazon), ever show investors or clients a working demo of Natasha, or a product roadmap? How do we know Natasha was actually an LLM and not just someone sitting in a call centre in India?
2. Was there a technical team behind Saunders capable of building such a model?
3. Was the goal really to build a domain-specific foundation model, or was that just a narrative to attract investment?
Having said that, the company went into insolvency because the CEO and CFO were misleading investors by significantly inflating sales figures through questionable financial practices. According to the Financial Times, BuilderAI reportedly engaged in "round-tripping" with VerSe Innovation. This raised red flags for investors, regulators and prosecutors, and led to bankruptcy proceedings
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…
Earlier quoted context omitted.
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?
"Your data is secure" is known to never be 100%. But what assessments and technology they say they use for security needs to be followed. And if it's found out that those are lies, then it's fraud. Kind of like how these guys lied about the volume of sales they had. Textbook fraud. They aren't in trouble for saying "AI is going to be great"
The company went into insolvency because the CEO and CFO were misleading investors by significantly inflating sales figures through questionable financial practices. According to the Financial Times, the Indian founders and accountants reportedly engaged in round-tripping with VerSe Innovation. That raised red flags for investors, regulators, and prosecutors, and led to bankruptcy proceedings.
Earlier quoted context omitted.
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.
It is not a completely different story. The lender yanked back the money they lent because they found out about fraudulent sales numbers. That led to the bankruptcy. It was still the people whose money was in the game who brought the company down in both scenarios because fraud is a big red line for anyone whose money is on the line
We also don't know what was discussed in private. For example, it could have been something like: "We want to be part of this investment opportunity, we'll give you $40 million. But if regulators start asking questions, we want the money back."
Without full context or legal findings, everything else is just speculation.
I'm surprised no one is talking about Microsoft's investment in BuilderAI, a total loss. It's unlikely they'll recover much, if anything. So why aren't they suing the CEO and CFO? Maybe some of the issues were handled quietly behind the scenes to avoid public exposure or reputational damage? I don't know.