Builder.ai collapses after revelation that its "AI" was hundreds of engineers

Builder.ai, once valued at $1.5 billion with backing from Microsoft, has filed for bankruptcy after revelations of deception. The company marketed an AI system for software development, but relied on manual labor from hundreds of Indian engineers. A financial round-tripping scheme with VerSe Innovation artificially inflated revenues. The collapse has led to lawsuits, layoffs, and investigations into potential securities fraud. This high-profile failure highlights growing scrutiny of AI claims in the tech industry.