U.S. prosecutors request Builder.ai to produce financial report after income exaggeration

U.S. prosecutors request Builder.ai to produce financial report after income exaggeration

U.S. prosecutors have requested Builder.ai to produce its financial reports following allegations of income exaggeration, according to sources familiar with the matter. The request comes amid ongoing investigations into the startup's financial practices, which have been under scrutiny since its bankruptcy filing in May 2025.

Builder.ai, a low-code/no-code platform that promised to democratize software development through AI, raised over $445 million in funding over eight years, including investments from Microsoft and the Qatar Investment Authority. However, the company's collapse has raised questions about the accuracy of its financial projections and the extent of its AI capabilities.

The company's former CEO, Manpreet Ratia, acknowledged in a company-wide call that the business model never matched its branding. The company's bankruptcy filing revealed that Builder.ai had provided lenders with overstated financial projections, leading to a breach of covenant and a seizure of $37 million from the company's accounts by Viola Credit [1].

The incident has sparked discussions around the need for technical due diligence in AI deals and the risks associated with "AI washing," a practice where companies package conventional technology services as artificial intelligence to attract funding. The failure of Builder.ai has underscored the importance of rigorous financial reporting and transparency in the tech industry.

Despite the setback, the broader low-code/no-code market remains resilient. Gartner projects that 60% of new enterprise apps will be developed using such platforms by 2028, and the global market is expected to reach $26 billion by the end of this year [2].

References:
[1] https://www.financialexpress.com/business/start-ups/why-did-microsoft-backed-1-3bn-builderai-collapse-accused-of-using-indian-codersforaiwork/3854944/
[2] https://cryptonewsland.com/best-meme-coin-to-buy-today-btfd-coins-0-0002-entry-and-11900-staking-roi-tease-gains-as-turbos-ai-buzz-grows-and-babydoge-burns-surge/