Builder.ai, a once-promising startup backed by Microsoft, has filed for bankruptcy in the United States, according to Bloomberg and the Financial Times. The company marketed a hybrid human-assisted Artificial Intelligence service that let clients chat with an assistant called Natasha and receive custom apps built by a mix of automation and engineers. A viral claim that Builder.ai hired hundreds of engineers in India to impersonate Natasha has circulated online; the company disputes that account and the Financial Times report raised doubts about the allegation.
Financial pressures, not the Natasha controversy, appear to have driven the collapse. The Financial Times reported that Builder.ai overstated sales by as much as four times and faced significant debt problems. Bloomberg said a lender seized funds after discovering the company’s actual revenue was substantially lower than previously claimed, though exact sums seized and previously reported revenue were not stated. The article also notes that Builder.ai owes money to cloud providers, including Amazon Web Services and Microsoft, but the specific amounts owed were not stated. Builder.ai posted a statement on LinkedIn saying it will enter insolvency proceedings and appoint an administrator to manage the company’s affairs, and it acknowledged historic challenges and past decisions that strained its financial position.
The company’s troubles echo earlier scrutiny of its claims about its technology. The wall street journal and other outlets reported in 2019 that Builder.ai had been accused of exaggerating its Artificial Intelligence capabilities, a pattern the article frames within broader worries about so-called AI-washing. The report also cites public skepticism: a pew research center survey found many U.S. adults view Artificial Intelligence as more likely to harm than benefit them, and another survey referenced in the article showed about half of respondents prefer speaking to a real person over an AI chatbot. The story was updated and corrected after publication to clarify how Builder.ai marketed itself and to adjust reported figures that were previously unclear.
