AI Startup Revealed To Be 700 Indian Employees Pretending To Be Chatbots (latintimes.com) 53
An anonymous reader quotes a report from the Latin Times: A once-hyped AI startup backed by Microsoft has filed for bankruptcy after it was revealed that its so-called artificial intelligence was actually hundreds of human workers in India pretending to be chatbots. Builder.ai, a London-based company previously valued at $1.5 billion, marketed its platform as an AI-powered solution that made building apps as simple as ordering pizza. Its virtual assistant, "Natasha," was supposed to generate software using artificial intelligence. In reality, nearly 700 engineers in India were manually coding customer requests behind the scenes, the Times of India reported.
The ruse began to collapse in May when lender Viola Credit seized $37 million from the company's accounts, uncovering that Builder.ai had inflated its 2024 revenue projections by 300%. An audit revealed the company generated just $50 million in revenue, far below the $220 million it claimed to investors. A Wall Street Journal report from 2019 had already questioned Builder.ai's AI claims, and a former executive sued the company that same year for allegedly misleading investors and overstating its technical capabilities. Despite that, the company raised over $445 million from big names including Microsoft and the Qatar Investment Authority. Builder.ai's collapse has triggered a federal investigation in the U.S., with prosecutors in New York requesting financial documents and customer records.
The ruse began to collapse in May when lender Viola Credit seized $37 million from the company's accounts, uncovering that Builder.ai had inflated its 2024 revenue projections by 300%. An audit revealed the company generated just $50 million in revenue, far below the $220 million it claimed to investors. A Wall Street Journal report from 2019 had already questioned Builder.ai's AI claims, and a former executive sued the company that same year for allegedly misleading investors and overstating its technical capabilities. Despite that, the company raised over $445 million from big names including Microsoft and the Qatar Investment Authority. Builder.ai's collapse has triggered a federal investigation in the U.S., with prosecutors in New York requesting financial documents and customer records.
A.I. (Score:5, Funny)
Actual Indians
Re: (Score:2)
Artificial Intelligence vs. Natural Graft & Swindling!
Comparing Apu to Orange-ized Crime (Score:1)
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Wait till the break into OpenAI's HQ... (Score:5, Funny)
It was fun while it lasted.
Re:Nvidia just Mexicans using Google (Score:2)
Nvidia ain't sending their best. Build a Firewall!
How many of them... (Score:2)
You could not make this up (Score:1)
Even with gen AI. Hilarious. You been techno scammed! What next? Electric bananas we need electric bananas. Those suckers will but anything.
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Even with gen AI. Hilarious. You been techno scammed! What next? Electric bananas we need electric bananas. Those suckers will but anything.
Already done, years ago:
Electrical banana
Is gonna be a sudden craze
Electrical banana
Is bound to be the very next phase
-Mellow Yellow, Donovan (1966)
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Re: You could not make this up (Score:2)
you appear to be "just saying" that you believe the OP was referring to an actual, electrified edible fruit. You're welcome to your opinion, but I'm not buying it.
When artificial intelligence isn't up to the task (Score:1)
Fake it with real intelligence!
Well, real, wetware brains, anyways. I'm not so sure how intelligent this operation was.
Re:When artificial intelligence isn't up to the ta (Score:5, Insightful)
Fake it with real intelligence!
Well, real, wetware brains, anyways. I'm not so sure how intelligent this operation was.
Hundreds of humans pretending to be AI pretending to be hundreds of humans. Even the irony is mocking the irony.
Sad part is a lack of revenue was likely the reason they were "busted". You couldn't even sell human-powered AI? Perhaps there's hope for us meatsacks in the workplace after all.
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It also has some rather significant security implications if the company sold that it had sandboxed customer accounts where customer data was only supposed to be exposed to the customer or to an AI system, not to human beings.
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Re: When artificial intelligence isn't up to the t (Score:2)
The real AI was the CEO... I mean, the friends we made along the way
Re: When artificial intelligence isn't up to the t (Score:2)
lolol
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Well, real, wetware brains, anyways. I'm not so sure how intelligent this operation was.
In went $1.5 billion. Out came $37 million they probably had a payroll of, say $20 million. If someone managed to keep the rest and gets away with it they may well consider themselves pretty clever.
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In went $445 million, for ~1/3rd share, making the whole company "worth" 1.5 billion.
Still a lot of money, but not 1.5B, also spread over at least 6 years of outgoings.
Amazon Go (Score:4, Insightful)
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Do note it wasn't profitable cheating that way, but they hoped enough venture capital would fund R&D to get the real AI good enough. Thus, they were buying time.
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What do you mean claimed? AI (Actual Intelligent) humans were combined with Computer Vision (camera transmitting mp4 video), to make this work. It was exactly as advertised. :-)
The giveaway.. (Score:1)
I was completely fooled, until I ran out of tokens and it asked me to do the needful.
AI.... (Score:2)
Legal, Productive, Profitable. If your business is using AI then you can only pick 2.
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So the hundreds of millions of people (probably nearly a billion now) using AI on a weekly basis have no use-case? Your brain can believe something like that?
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Well, nobody's denying the lawyers using it to save time writing briefs that mention court cases that don't exist, and students trying to get one up on their professors, and professors using it to try to find which submissions were written by LLMs, and bad computer programmers using it to write bug ridden security-compromised code without needing to know the language or environment, and websites using it to create websites that contain text to fool search engines into looking like informative content so the
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Huh?
This story certainly doesn't prove that.
Millions of us, like me, use AI every day to make our jobs easier for ourselves, whether that's writing code with GitHub Copilot, or producing slide decks for a business presentation, or getting quick answers to dumb stuff posted by slashdot users.
I'd say the use cases at scale, are beyond number already.
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This article is about a Microsoft family for a very basic AI scam. Amazon has also got caught falling for the same thing. And if you keep an eye on indictments and SEC filings, you'll see quite a few similar scams being prosecute
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So you are asserting that AI is nothing but a scam?
Here's how I can tell the difference between a real product and a scam: AI products provide real value to me.
When I use GitHub Copilot, it significantly shortens my coding time. As an example, I've been doing some SQL Server work with XML blobs. The SQL syntax to update or query XML, is arcane and has frustrating limitations. GitHub Copilot is consistently able to generate the proper code, saving me hours of frustration. Once it generates the code, I know e
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Gemini is like a guy choking out a forest with vines so they can sell more machetes. None of this shit is productive. When any business replaces an employee with a chatbot, they loose customers, revenue and gain reputational harm when those bots start telling people to kill themselve
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Wow, you are way out there on a limb. Do scams exist? Yes. Is all of AI a scam? Hardly.
On one point we agree: "When any business replaces an employee with a chatbot..." This idea of replacing employees with chatbots is nothing but marketing hype. AI can't do that, and won't be able to do that for a long time. But what AI *can* do, is increase the productivity of existing employees.
How do I know that my GitHub Copilot code suggestions aren't a scam? Because there is no way a human could read my code, come up
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I'm not a troll or a rube
If you have to say it...
While you go around insisting that the earth is flat, the rest of the world will move on. (We do agree on crypto, however.)
Personally, I'm thoroughly enjoying this latest technology revolution. It's given me amazing new tools that I didn't believe possible. It's like 1994 all over again.
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I asked gemini what's a safe thinning agent for cannabis oil and it suggested MCT oil vaping. Then I asked it if it
Mechanical Turk - reinvented! (Score:3)
Reminds me of the real mechanical turk [wikipedia.org] (not the Amazon crap), which was a 16th century contraption supposedly using advanced mechanical intelligence to play chess.
It was really just a guy in a box.
Who would use it more than once? (Score:3, Interesting)
The summary claimed the company had $50m in revenue (the real number, not corrected).
I can't understand how it got any revenue, ever - if you ask any real AI to produce code you'll have results in a minute or so.
But if it was backed by people writing real code, answers would have taken many minutes to hours to produce! Heck just the time to write a summary of the request would seem awfully long.
Who would use that after any trial? Who was paying them at all?
Or was it 700 engineers each with a trial chatGPT account just pasting questions and answers back and forth between user and chatGPT?
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> if you ask any real AI to produce code you'll have results in a minute or so.
> But if it was backed by people writing real code, answers would have taken many minutes to hours to produce! Heck just the time to write a summary of the request would seem awfully long.
Maybe the code worked? No functions or language features were hallucinated? No obvious security holes and other bugs were in the code?
India known for IT (Score:2)
Nothing wrong (Score:1)
Hear me out (Score:1)
Isn't their business model actually better than all the outsourcing offshore fly by night IT shops AND the half baked output from myriad beta quality AI agents ??
You are getting your stuff done without delays, near real time i am guessing, and without having to deal with strange accents. And stranger excuses.
No hallucinations, barring few people on real weed.
No melting GPUs and 1000s of MW nuclear power plants, just 2000 kcal per unit of staple Indian food. Even if the spices are nearly radioactive.
Re: Hear me out (Score:2)
well said
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Not AI but (A)I or symply "I", drop the "A" :-) (Score:1)
Not AI but (A)I or symply "I", drop the "A" :-)
Microsoft will re-hire... (Score:2)
Microsoft wll re-hire these "chatbots" in the wake of their layoffs...
JoshK.
Take the money and run. (Score:1)
He knew it was fake, he knew it was being investigated. Why not transfer millions to various bank in other countries. Transfer it some more, buy a bunch of bitcoins, and take it out as cash. Then get lost. He had access to close to $50 million, even with all transfers and fees for all that he would of been able to do at least $10 million and been able to get to some place relatively safe.
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Yeah I wonder how many startups are just total scams... Why bother working 8 hours a day, 5 days a week (over 50% of your waking adult life) - when you can start a hilariously dumb startup - e.g. Juicero - even if the thing totally falls over, you've already paid yourself millions over the few years it was in operation, and when it fails you aren't on the hook for that money - you've made more than you can earning honestly. Part of why our society is such a fraud - it does not reward hard work, it reward
Indians? (Score:1)
I'm surprised they weren't Turks.
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why (Score:2)
Startup failed because actual chatbots do a better job.
What a great story! (Score:1)
Wait. Wait. Wait. (Score:2)
If I read this correctly it means....
The AI was inside us all along!