Microsoft makes strategic investment into Builder.ai, integrates its services into Teams
TechCrunchJUN 2023
AI Startup Builder.ai Files for Bankruptcy
Above: The Builder.ai booth at the Web Summit in Lisbon, Portugal, on Nov. 3, 2022. Image copyright: Zed Jameson/Contributor/Bloomberg via Getty Images
The Spin
Narrative A
Builder.ai's downfall is a cautionary tale in an era where "AI-powered" has become a marketing goldmine. For eight years, the company overstated its use of artificial intelligence, misleading investors by passing off human labor as automated innovation and convincing major corporations and sovereign wealth funds to invest in the illusion. Its collapse underscores the growing problem of AI washing — when companies inflate their capabilities to ride the AI hype wave — echoing the dot-com bubble's blend of buzzwords and investor FOMO.
Narrative B
Builder.ai's collapse serves as a wake-up call for anyone who believed no-code solutions could replace genuine product development. Behind the bold claims lay a costly, manual process supported by engineers and vendor lock-in. True software isn't just a login screen and dashboard — it's ownership, iteration, and strategy. If $450 million couldn't automate that, founders should rethink what it really means to build a product.