On August 15, 2019, The Wall Street Journal published “AI Startup Boom Raises Questions of Exaggerated Tech Savvy” by Newley Purnell and Parmy Olson. The article reported that Engineer.ai, a London-based startup that claimed to use artificial intelligence to “largely automate the development of mobile apps,” was according to several current and former employees exaggerating its AI capabilities to attract customers and investors. Documents the Journal reviewed suggested the company did not use AI to assemble code as advertised and instead relied on human engineers, many based in India, to do most of the work. The reporters framed the case within a wider problem: because AI is complex and loosely defined, it is hard for non-experts to verify a startup’s claims, which makes “AI” an easy label to slap on conventional software work.
The exposure did not stop the company. Engineer.ai rebranded as Builder.ai and went on to raise hundreds of millions of dollars from investors including Microsoft, the World Bank’s IFC, and SoftBank’s DeepCore, reaching a valuation above one billion dollars. Its marketing centered on an assistant called “Natasha” and the promise that building an app could be as easy as ordering a pizza.
The arc closed in 2025. In May 2025 Builder.ai entered insolvency proceedings after a lender seized funds from its accounts, and the company laid off most of its staff and began bankruptcy filings across the United Kingdom, United States, United Arab Emirates, Singapore, and India. A company statement said the business had been “unable to recover from historic challenges and past decisions that placed significant strain on its financial position.”
The lesson for buyers and investors is that “AI” on a label is a claim, not a guarantee. When a vendor’s economics only make sense if the automation is real, it is worth asking exactly what the machine does and what the humans behind it do.