Indian AI Unicorn Builder.ai Collapses Amid Fraud Allegations, Enters Insolvency
Builder.ai, once a $1.5 billion-valued Indian AI startup backed by tech giants including Microsoft and SoftBank, has spectacularly collapsed, laying off all employees and entering insolvency proceedings.
Founded in 2016, Builder.ai promised to simplify app development using AI, branding itself as making app creation “as easy as ordering pizza.” Led by CEO Sachin Dev Duggal—who styled himself the “Chief Wizard”—the company raised over $500 million in funding.
However, investigations reveal that Builder.ai’s touted AI technology was largely a facade. According to reports, much of the coding was manually performed by human developers in India, with only minimal automation for pricing and scheduling. Furthermore, Duggal allegedly inflated revenue figures by 300%, with internal audits showing actual revenues of $55 million versus the claimed $220 million.
The collapse accelerated in May 2025 when creditor Viola Credit seized $37 million from the company’s accounts, leaving insufficient funds to meet payroll. Builder.ai officially entered insolvency proceedings on May 21, 2025.
Legal troubles have compounded the crisis: Duggal faces money laundering investigations, while co-founder Saurabh Dhoot is implicated in a loan fraud case. Duggal stepped down as CEO in February 2025 but retained his “Chief Wizard” title until the end.
The downfall of Builder.ai stands as a stark cautionary tale in the AI boom, exposing the risks of inflated valuations and unproven technology in the fast-growing AI startup sector.
