A $1.5 billion AI company backed by Microsoft has shuttered after its ‘neural network’ was discovered to actually be hundreds of computer engineers based in India.

AI is all the rage right now as companies laser in on language-learning models like ChatGPT, Gemini, LLaMA and more.

However, one of these AI brands has been exposed as a total sham in a wild scam that’s going viral on social media.

‘Natasha,’ an AI app-building service from London-based Builder.ai, claimed it had the ability to use artificial intelligence to create applications. From coming up with app designs to writing code, Natasha promised to pump out programs in record time.

Microsoft reportedly backed the ‘neural network’ with a $455 million investment, leading to a valuation of $1.5 billion… but it turns out all that cash was going toward a workforce of over 700 Indian engineers, rather than an AI.

AI app-building company exposed as hundreds of human workers

As reported by Binance, employees said the majority of labor at Builder.ai was produced by humans, with some clerical work being done using general software.

The farce lasted for eight years, getting exposed in May 2025. Builder announced bankruptcy shortly thereafter, writing in a statement on LinkedIn that it would be “entering into insolvency proceedings.”

“Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,” the company wrote.

Documents reviewed by Bloomberg showed that Builder also worked with VerSe, an India-based social media startup, to falsely increase its sales numbers, regularly billing each other for similar amounts between 2021 – 2024.

Sources close to the situation told Bloomberg that services weren’t actually rendered from either company for these payments — claims that VerSe has vehemently denied.

“We’re not the kind of company that is in the business of inflating revenues,” VerSe co-founder Umang Bedi said to Bloomberg, calling the accusations “baseless and false.”