Microsoft-backed AI start-up exposed as scam business

British AI start-up Builder.ai, once valued at over £15bn and backed by Microsoft, has collapsed after revelations of widespread fraud. The company marketed its service as an AI-powered app development platform, but it turned out that around 700 Indian engineers were manually doing the work behind the scenes.

Further investigation revealed that Builder.ai greatly exaggerated its revenues, including by recording fictitious sales and engaging in so-called "round-tripping" transactions with Indian company VerSe Innovation to artificially inflate its figures. These irregularities led to the company filing for bankruptcy in the US in May, with millions of dollars in unpaid debts to Microsoft and Amazon, among others.