The AI dooooooom thread

[viper37]

Maybe AI isn't so threatening after all


Fake it till you unicorn? Builder.ai's Natasha was never AI – just 700 Indian coders behind the curtain

If you haven't seen your LinkedIn feed flooded with takes on Builder.ai's collapse, you're following the wrong people. The London-based AI unicorn, once lauded for making app development "as easy as ordering pizza," has imploded spectacularly amid fake AI claims, financial fraud, and a data breach exposing 1.29 terabytes of client secrets.
How did a startup backed by Microsoft, SoftBank, and Qatar's $450 billion sovereign wealth fund become Silicon Valley's latest cautionary tale? Let's break down the collapse.


The scandal erupted on May 31 when Ebern Finance founder Bernhard Engelbrecht posted a bombshell thread on X: "Builder.ai's 'AI' was 700 humans in Delhi pretending to be bots. The only machine learning here was investors learning they'd been duped." The post amassed 2.8 million views in 24 hours, with critics dubbing it "the Theranos of AI" and "WeWork 2.0." 

Beyond the schadenfreude lies tragedy. The 700 Indian engineers, paid $8–15 per hour, now face visa revocations and blacklisting. "They forced us to use fake Western names in client emails," said former developer Arjun Patel. "Now I can't get hired because employers think I'm a bot."
Leaked internal Slack messages reveal engineers were instructed to:

• Mimic AI response times by delaying code delivery by 12–48 hours
• Use templated responses like "Natasha is optimising your request" while manually building apps
• Avoid technical jargon in client calls to maintain the "no-code" illusion

Former employees described the operation as "a call centre with better marketing." One developer confessed: "We'd laugh about 'Natasha' — our inside joke for the graveyard shift."

The money trail: How Builder.ai faked $220M in sales
While the AI deception is staggering, the financial engineering is equally brazen. Documents show Builder.ai and Indian social media giant VerSe Innovation engaged in round-tripping from 2021–2024, billing each other $180 million for nonexistent services. Builder.ai would invoice VerSe $45 million quarterly for "AI licensing," while VerSe billed Builder.ai $44.7 million for "market research"—a laundering scheme that inflated both companies' revenues by 300%.
When lenders demanded proof of its $220M 2024 sales pipeline, an internal audit revealed the truth:

• Real revenue: $55M (75% from legacy human-services contracts)
• Projected losses: $99M for 2025
• Cash burn: $32M/quarter pre-collapse

"It was a Potemkin startup," said a Viola Credit executive. "Even their Mumbai office was a WeWork sublet."
Before the financials unravelled, Builder.ai faced a December 2024 breach exposing:

• 3.1 million client records (emails, project specs, NDAs)
• 337K invoices showing manual billing at $18/hour rates
• Internal memos discussing "AI placebo effects" and "reputation firewalls"

Security researcher Jeremiah Fowler discovered the data on an unsecured AWS bucket. "The folder '/Natasha_AI' contained Excel sheets tracking human coding hours. It was fraud in plain sight." 
So, was any of Builder.ai real?
The evidence says no:

• AI Claims: 0 verified NLP/ML patents; 100% human-coded output 
• Financials: 300% revenue overstatement; $180M fake invoices 
• Leadership: CEO buying Dubai real estate while laying off 1,000 staff 

Builder.ai's collapse has triggered sector-wide panic. Sequoia Capital's AI lead tweeted: "If a 'unicorn' with Microsoft's backing was fake, what does that say about the other 3,000 AI startups?"
Data points to a bubble: 90% of AI startups have no proprietary models and $28B in VC AI funding since 2023 — 40% to companies with under $1M revenue. 
As US prosecutors subpoena financial records, the tech world faces uncomfortable truths about due diligence in the AI gold rush. For now, Builder.ai's legacy is clear: a $1.5B monument to the power of hype over substance.

[crazy canuck]

Artificial indeed

[Baron von Schtinkenbutt]

All Indians

[Jacob]

All Indians

Actual Indians is the one I heard.

[Baron von Schtinkenbutt]

Actual Indians is the one I heard.

Forgot about that, I think Actually Indians is what I was really thinking of.

[garbon]

https://www.reuters.com/business/media-telecom/disney-universal-sue-image-creator-midjourney-copyright-infringement-2025-06-11/

Disney, Universal sue image creator Midjourney for copyright infringement

Walt Disney (DIS.N), opens new tab and Comcast's (CMCSA.O), opens new tab Universal filed a copyright lawsuit against Midjourney on Wednesday, calling its popular AI-powered image generator a "bottomless pit of plagiarism" for its use of the studios' best-known characters.
The suit, filed in federal district court in Los Angeles, claims Midjourney pirated the libraries of the two Hollywood studios, making and distributing without permission "innumerable" copies of characters such as Darth Vader from "Star Wars," Elsa from "Frozen," and the Minions from "Despicable Me".

Spokespeople for Midjourney did not immediately respond to a request for comment.
Horacio Gutierrez, Disney's executive vice president and chief legal officer, said in a statement: "We are bullish on the promise of AI technology and optimistic about how it can be used responsibly as a tool to further human creativity, but piracy is piracy, and the fact that it's done by an AI company does not make it any less infringing."

NBCUniversal Executive Vice President and General Counsel Kim Harris said the company was suing to "protect the hard work of all the artists whose work entertains and inspires us and the significant investment we make in our content."
The studios claim the San Francisco company rebuffed their request to stop infringing their copyrighted works or, at a minimum, take technological measures to halt the creation of these AI-generated characters.

Instead, the studios argue, Midjourney continued to release new versions of its AI image service that boast higher quality infringing images.
Midjourney recreates animated images from a typed request, or prompt.
In the suit filed by seven corporate entities at the studios that own or control copyrights for the various Disney and Universal Pictures film units, the studios offered examples of Midjourney animations that include Disney characters, such as Yoda wielding a lightsaber, Bart Simpson riding a skateboard, Marvel's Iron Man soaring above the clouds and Pixar's Buzz Lightyear taking flight.

The image generator also recreated such Universal characters as "How to Train Your Dragon's" dragon, Toothless, the green ogre "Shrek," and Po from "Kung Fu Panda."
"By helping itself to plaintiffs' copyrighted works, and then distributing images (and soon videos) that blatantly incorporate and copy Disney's and Universal's famous characters -- without investing a penny in their creation -- Midjourney is the quintessential copyright free-rider and a bottomless pit of plagiarism," the suit alleges.

...

[Sheilbh]

We use AI s lot to transcribe our calls, but review the notes before sending them to all participants.

Reminds me of the recent PopBitch item I really enjoyed and shared with everyone at work This feels like a literal panic dream I've had.

>> AI Goes Popbitch <<
ITV staff - your mic is on!

Following the company-wide adoption of Google's AI product Gemini at ITV, all meetings now have the option of transcriptions and summaries. Handy, right!

Maybe, but it has also led to some awkward office casualties linked to the shiny new feature.

In one online session – which was being transcribed and summarised - a couple of employees stayed on after the meeting had ended and had a good old bitch.

A pithy summary of their bitching session was duly appended to the meeting notes, with a word-for-word transcription also available for anyone who wanted a deep-dive.

I did not sign up for this Cyberpunk future.

Also this one:


Even if these companies are possibly scams (which I wouldn't bet against). This is the bet, right? The massive capital in AI is that it will improve productivity which basically means do for white collar jobs (especially towards the bottom of the labour market) what the industrial revolution through to automation did for blue collar roles. You pay for the AI in your enterprise agreement with Salesforce or Oracle and you get rid of loads of your customer service people.

I feel like my most alarmist take on all this is that if that bet is right, then the impact of this is going to be hugely transformative and socially disruptive - reordering economies and probably resulting in widespread unemployment etc - and if that bet is wrong, then we've probably gone through one of the biggest misallocations of capital in economic history that will be very painful to unwind - quite possibly causing serious economic damage and widespread unemployment etc

I think there's something interesting in the echo of both of these to the more misanthropist side of green politics ("we are the virus"/ the "nature is healing" in the absence of humanity) stuff. It's something I think about more and more but my own politics is becoming far more almost primarily humanist - I think more and more that the most important thing which is being increasingly overlooked in our world is the human - each of us as individual, flawed, problematic humans. And particularly the peripheral - the poor, the vulnerable, the elderly, the unloveable.

Inevitably because it's true for me I also think it's true for the left in general but I think the left really needs to ground itself in (to nick Leo XIV's phrase) a "defence of human dignity, justice and labour".

[Jacob]

As I understand it that's not a real company, but an advertising company trying to generate controversy to raise its profile with a fake campaign.

And if so, it seems to be working.

[Josquius]

https://futurism.com/ceos-ai-clones-hallucinations

CEOs Are Creating AI Copies of Themselves That Are Spouting Braindead Hallucinations to Their Confused Underlings

Kind of interesting.
Though honestly it does seem to me ceo speeches are usually very easily replaceable with AI.