In May 2025, Builder.ai filed for bankruptcy after an internal investigation uncovered inflated revenue reports and fraudulent accounting practices. The company had positioned itself as a revolutionary AI-powered no-code development platform, attracting major investors and industry praise.
But the truth? No real AI, minimal automation — just 700engineers in India manually writing the code behind the scenes.
It’s an old playbook. Like Theranos in biotech, Builder.ai sold a vision of ‘transformative’ technology that never materialized—exposing the systemic risks of hype-driven funding in unvetted systems.
This March, we attended MWC 2025 in Barcelona, and the feeling was eerily similar. AI was everywhere—on banners, in product pitches, in keynote speeches. But was it truly integrated? Not really.
Many companies seemed to be using "AI-powered" as a marketing necessity rather than a genuine technological breakthrough. If a product didn’t have an AI label, it risked being seen as outdated. The pressure to appear innovative was palpable, even when the actual implementation was questionable.
At MWC, we also attended a conference on the EU AI Act (Regulation (EU) 2024/1689 of the European Parliament and of the Council), which clarified a crucial point: the company using AI is responsible for its data, security, and compliance—not the AI itself.
This means that if a business claims to use AI, it must ensure that its systems comply with regulations and protect user privacy. If data is misused or leaked, the company—not the technology—is accountable.
Builder.ai is a perfect example of why this matters. It sold an AI-powered dream, but in reality, it was just manual labour disguised as automation. The real concern isn't just transparency—it's the regulatory loopholes that allowed it to operate unchecked for so long. And if sensitive user data had been involved, the fallout could have been far worse.
Britain’s approach to AI regulation relies on broad principles: transparency, security, fairness. Nice in theory. In practice? It’s vague. Without strict enforcement, loopholes are inevitable.
The EU’s AI Act is more robust—at least on paper. Strict rules, steep fines. But enforcement is key. Builder.ai operated freely until it crumbled. Regulations only work if they prevent problems before they explode.
Tech moves faster than lawmakers. By the time regulators step in, AI systems have already collected, processed, and monetised vast amounts of user data. Is the Builder.ai scandal an isolated case—or just the tip of the iceberg?
The story is always the same: flashy tech promises, easy money, regulators scrambling to catch up. Until we demand real transparency, mirages like Builder.ai will remain one of the tech industry’s most profitable illusions.
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