“It was just a sleight of hand”: Microsoft thought it was financed a revolutionary AI, it was just 700 humans who mimed a chatbot
“They had not even started to develop AI”: Microsoft trapped by 700 fake chatbots in a startup at 1.5 billion © Mix and Match Studio / Les Numériques
Builder.ai sold a dream: an AI capable of building a mobile application as you order a pizza. Behind this attractive showcase, reality was much more trivial – and much more human. 700 India -based engineers were doing all the work, while the company made a technological miracle believe.
Builder.ai: the artificial intelligence scam that tramples Microsoft
It is a spectacular, almost caricatured fall. Builder.ai, London nugget presented as the next software development revolution, has filed for bankruptcy. Officially, the platform used an AI called “Natasha” to automatically generate applications. Unofficially ? Everything was done by hand, by humans. Many humans. Nearly 700, employees in India to code the chain and make an illusion.
Technology was not working as announced and was essentially nothing more than a sleight of hand.
In May 2025, the story changed. Viola Credit, creditor of the company, discovers that Builder.a has faked its projections of income: 220 million announced for 2024 … while the audit reveals 50 million, just. The money is seized, the hoax breaks out. And it is the whole structure that collapses.
Microsoft trapped by 700 fake chatbots in a startup at 1.5 billion © Rights reserved
The bluff was not new, however. From 2019, The Wall Street Journal questioned the authenticity of Builder.ai. Several former employees described an empty platform, behind which only human developers operated. A ex-frame, Robert Holdheim, had even filed a complaint for abusive dismissal, claiming that the AI sold to customers did not exist.
The applications were allegedly built 80 % by an artificial intelligence technology that the company had not even really started to develop.
The rest is worthy of a Hollywood scenario: Microsoft and Qatar inject hundreds of millions of dollars, the founder promises Monts and Wonders, customers command … and nobody suspects that “Natasha”, the star AA, is only a first name on handmade code.
Today, Builder.AI leaves behind more than 1000 unemployed employees, 115 million debts (including 30 towards Microsoft and 85 towards Amazon), and a bitter taste in the mouth of an already feverish sector. A federal survey is underway in the United States.
This shipwreck asks an urgent question: how many other startups surf on AI without doing it? The “AI Washing”-This tendency to repaint from the classic service in artificial pseudo-intelligence-becomes a real scourge. And Builder.ai is, for the moment, the biggest crash.
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