Builder.ai, a no-code app development startup once valued at $1.5 billion and backed by tech giant Microsoft, has filed for bankruptcy. The filing comes after a lender seized $37 million, triggering a financial and reputational collapse.
Touted as an AI-powered platform capable of building apps with minimal human input, Builder.ai drew significant investor interest by branding itself as a leader in the no-code and AI automation space. However, internal operations reportedly told a different story. Much of the app development work was manually handled by engineering teams in India, undermining the company’s core AI narrative.
Critics argue that Builder.ai’s artificial intelligence capabilities were overstated, describing its technology more as a branding tool than a genuine breakthrough. This revelation has intensified scrutiny over the growing trend of AI startups using hype-driven marketing to attract funding without delivering truly autonomous solutions.
The collapse of Builder.ai highlights a broader issue in the tech ecosystem: the widening gap between AI hype and reality. As the market continues to favor innovation buzzwords, the Builder.ai case serves as a cautionary tale for investors and entrepreneurs alike.
