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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.

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Builder.aiBuilder.ai boasted a fast, effective way for “anyone” to get an application fast.

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.

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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.”

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“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.

LinkedIn: builder.ai

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.

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“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.”

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According to a report from NPR, Meta plans to shift the task of assessing its products’ potential harms away from human reviewers, instead leaning more heavily on AI to speed up the process. Internal documents seen by the publication note that Meta is aiming to have up to 90 percent of risk assessments fall on AI, NPR reports, and is considering using AI reviews even in areas such as youth risk and “integrity,” which covers violent content, misinformation and more. Unnamed current and former Meta employees who spoke with NPR warned AI may overlook serious risks that a human team would have been able to identify.

Updates and new features for Meta’s platforms, including Instagram and WhatsApp, have long been subjected to human reviews before they hit the public, but Meta has reportedly doubled down on the use of AI over the last two months. Now, according to NPR, product teams have to fill out a questionnaire about their product and submit this for review by the AI system, which generally provides an “instant decision” that includes the risk areas it’s identified. They’ll then have to address whatever requirements it laid out to resolve the issues before the product can be released.

A former Meta executive told NPR that reducing scrutiny “means you’re creating higher risks. Negative externalities of product changes are less likely to be prevented before they start causing problems in the world.” In a statement to NPR, Meta said it would still tap “human expertise” to evaluate “novel and complex issues,” and leave the “low-risk decisions” to AI. Read the full report over at NPR.

It comes a few days after Meta released its latest quarterly integrity reports — the first since changing its policies on content moderation and fact-checking earlier this year. The amount of content taken down has unsurprisingly decreased in the wake of the changes, per the report. But there was a small rise in bullying and harassment, as well as violent and graphic content.

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AI company files for bankruptcy after being exposed as 700 human engineers

AI app-building company exposed as hundreds of human workers

Meta will reportedly soon use AI for most product risk assessments instead of human reviewers