AI Natasha turned out to be hundreds of Indian programmers – its developer squandered Microsoft’s money and went bankrupt – The London-based startup Builder.ai, once hailed for its revolutionary AI-powered approach to application development, has filed for bankruptcy protection, marking a dramatic fall from grace. Founded roughly a decade ago with significant operations across five countries, the company gained notoriety for its promise of “Natasha AI,” an artificial intelligence that supposedly wrote software code based on customer requests, eliminating the need for human programmers. However, the reality was far more conventional, with investigations revealing that the code was primarily written by human programmers, and the AI was largely a façade for a questionable business model.
Despite a damning investigation by The Wall Street Journal in 2019, which exposed the overstated role of AI in their software development process, Builder.ai continued to attract significant investor funding. Surprisingly, in 2023, tech giant Microsoft even planned to integrate Builder.ai’s tools into its offerings, including its cloud services.
Riding the wave of AI hype, Builder.ai successfully captivated investors, achieving unicorn status with a market capitalization exceeding $1 billion. Major players like Microsoft (who also invested equity), the Qatar Investment Authority, and numerous other large funds poured over $440 million into the startup.
However, the tide began to turn in February 2025, when Builder.ai underwent a management shake-up. The new leadership team attributed the company’s subsequent failures to the previous management’s poor financial planning, rather than the misrepresented AI technology itself.
The situation reached a critical point in May 2025 when Viola Credit, a major lender, seized $37 million from Builder.ai’s accounts, leaving the company with a mere $5 million in restricted funds. This financial blow effectively paralyzed Builder.ai’s operations across its five key markets: the UK, US, UAE, Singapore, and India. In response, the company was forced to lay off the majority of its workforce and file for bankruptcy protection in an attempt to salvage parts of its business in individual countries.
The downfall of Builder.ai serves as a cautionary tale about the dangers of overstating technological capabilities and the importance of sound financial management, even amidst significant investor enthusiasm. The revelation that “AI Natasha” was, in reality, a team of hundreds of Indian programmers highlights the gap between marketing hype and actual technological innovation, ultimately leading to the company’s dramatic collapse.
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