Sachin Dev Duggal's Builder.ai – the first big AI bust

Sachin Dev Duggal, Founder & Chief Wizard, Builder.ai

(Image credit: Stephen McCarthy/Sportsfile for Web Summit Qatar via Getty Images)

Last summer, Sachin Dev Duggal and his family moved to Dubai, leaving behind an unexploded bomb. The self-proclaimed “chief wizard” of Builder.ai – the London start-up that grew into one of Europe’s biggest and buzziest AI unicorns – was already facing board concerns about “gaps” between the sales it reported and actual revenues. Debt was mounting and, although you might not have guessed it from Duggal’s glamorous Instagram account (yachting in Monaco, tennis in Capri…), money had become an issue. It was the start of the first big bust of the AI boom.

It took less than a year for Builder.ai to collapse, leaving a trail of creditors and some of the world’s top tech investors reeling in its wake, says the Financial Times. Duggal, 42, had raised more than half a billion dollars from the likes of Microsoft and Qatar’s sovereign wealth fund – with the simple pitch that the start-up could use AI to make building apps “as easy as ordering pizza”. Realising they’d backed a business whose seemingly healthy revenues were equally “artificial” was a shock.

The tech may be new, but the story’s as old as they come – the triumph of “hype over substance”. But building hype, or “vision”, came naturally to Duggal, says Bloomberg, and he was equally adept at transforming it into respectability. The catalyst that opened up the cash spigots for his idea of “democratising programming for the masses” was the launch of ChatGPT in late 2022. By the following summer, both Microsoft and Qatar’s fund were on board, along with several other investors, including Lakestar, Iconiq Capital, Singapore’s Jungle Ventures and Jeffrey Katzenberg’s WndrCo. Duggal, meanwhile, had become a fixture on the tech conference circuit. Months before the first signs of trouble began appearing in 2024, he was at Davos sponsoring “glitzy events with celebrities”.

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Can Sachin Dev Duggal bounce back?

A deeper dive into Duggal’s business history might have exposed his feet of clay. He enjoyed a dazzling start – at least according to online biographies – and colleagues at his first venture in 2004, cloud-computing firm Nivio, described him as “smart and charismatic”. But the company, based in Switzerland, always struggled with profitability, and one investor later alleged Duggal “inappropriately transferred” a large sum of cash to his personal bank account (an allegation never upheld in court).

Duggal claims that when he exited Nivio, which collapsed in 2013, it was worth $100 million. In fact, he was ousted by the board. Duggal’s next venture – a photo-sharing app called Shoto – was also short-lived, but his struggle to find competent software developers provided the inspiration for Engineer.ai in 2016. Yet within three years, he stood accused by his former chief business officer of overstating the firm’s technical abilities, using two sets of books and making transfers to his private accounts. The parties later settled the dispute, but it prompted a rebrand to Builder.ai in 2019.

Renowned for his love of globe-trotting and luxury, Duggal is currently keeping a low profile in Dubai, while investigations into the collapse of Builder.ai continue. “I’m proud of the team who dared to build a bold ambition. Every success was theirs; the failures were mine,” he says nobly. Meanwhile, he is actively fundraising for a new venture – “to help others navigate the wild world of start-ups and AI”.

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Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors (BSME) editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.