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Builder.ai overstates sales and fakes backend tech
How much of the artificial intelligence (AI) revolution is real, and how much of it is all hype?
Builder.ai, the Microsoft-backed British AI company, is now entering insolvency proceedings amid accusations it inflated its revenues by more than 20% on multiple occasions.
Builder.ai’s claim to fame was its promise of simplifying the creation of apps and websites with the help of AI — a pitch that helped it raise over $500 million from prestigious investors like the Qatar Investment Authority, the World Bank Group’s International Finance Corp., WndrCo, Lakestar, and SoftBank.
The alleged overstating of sales figures suggests a desperation to maintain investor trust and confidence. Builder.ai has a shady past. It was previously known as Engineer.ai, which claimed to automate mobile app development using AI. But in reality, it relied on engineers from India to do most of the work.
Fake it ‘til you make it?
Builder.ai’s downfall sheds light on the fake it ‘til you make it attitude prevalent among AI startups. Legitimate and ethical entrepreneurship appears to have been set aside in favor of capitalizing on the AI hype.
A 2024 study showed that 92% of AI and tech startups fail in their first few years. Creating a truly powerful AI engine is a highly technically complex process that requires considerable time and expertise. Aspiring tech savants have overlooked the barriers to entry of the AI ecosystem. They have also overestimated the level of proficiency their team has to have.
Apart from the lack of technical prowess, startups struggle with establishing a clear product identity, pinpointing customer needs and preferences, and finding a sustainable pricing model. These deficiencies have created a gap between what they promised investors and what their machine can actually do.
Venture capitalists are also culpable. Afraid to be left behind, they shell out millions of dollars without doing proper due diligence. Those losses probably won’t make a dent in their financial coffers. However, the increasing number of AI startups that have failed to deliver on their promises has created a toxic climate within the segment. AI is regarded as a powerful tool to supercharge economies, but has instead become a haven for fraud.
Old, proven tools
As the adage goes, while the early bird gets the worm, the second mouse gets the cheese. If you’re a business looking to use AI to enhance your operations, it might be best to adopt a wait-and-see mentality. The new-age tech is still rife with more questions than answers.
The rise of AI brought promises of cost efficiencies, streamlined workflows, and significant revenue boosts — the same benefits provided by offshore outsourcing. Tech firms are still figuring out how to harness the power of AI. Global employment remains a fundamental tool leveraged by the world’s top businesses. At this point, it’s wise to take a step back from all the AI hoopla and invest in tried and tested solutions available offshore.
The question for your business
Have you started on your outsourcing journey?
