Core Viewpoint - The collapse of Builder.ai, once valued at $1.5 billion, reveals a significant fraud involving the misrepresentation of AI capabilities and financial data, leading to substantial losses for investors and raising alarms about the integrity of the AI market [3][30]. Group 1: Company Background and Growth - Builder.ai was founded in 2016 by Sachin Dev Duggal, who aimed to simplify app development using AI, promoting the idea that creating apps could be as easy as ordering pizza [4][7]. - The company quickly gained traction in the investment community, attracting significant funding from major investors like Microsoft, SoftBank, and Qatar Investment Authority, with a peak valuation of $1.3 to $1.5 billion [10][30]. Group 2: Misrepresentation of Technology - Despite its claims, Builder.ai's "AI" was largely a marketing facade, with most development work performed manually by low-cost Indian engineers, contradicting the company's narrative of automated processes [12][19]. - The supposed AI project manager, "Natasha," was revealed to be a simple front-end interface, masking the manual labor behind the scenes [15][18]. Group 3: Financial Fraud and Collapse - Builder.ai's financial troubles escalated when it falsely projected revenues of $220 million for 2024, while internal audits revealed actual revenues of only $55 million, leading to investigations and legal scrutiny [22][24]. - The company engaged in "round-tripping" transactions with VerSe Innovation to artificially inflate sales figures, further complicating its financial integrity [23][24]. - In May 2025, Builder.ai filed for bankruptcy across multiple countries, leaving employees unpaid and investors seeking accountability [28][29]. Group 4: Broader Implications for the Industry - The downfall of Builder.ai highlights a broader trend of "AI washing," where companies exaggerate their AI capabilities to attract investment, leading to a potential crisis of confidence in the tech sector [31][36]. - Gartner predicts that the No-Code market will reach $26 billion by 2028, indicating that while the market may grow, the risks associated with misleading claims will persist [33].