[HN Gopher] Builder.ai Collapses: $1.5B 'AI' Startup Exposed as ...
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Builder.ai Collapses: $1.5B 'AI' Startup Exposed as 'Indians'
Author : healsdata
Score : 265 points
Date : 2025-06-03 13:17 UTC (9 hours ago)
(HTM) web link (www.ibtimes.co.uk)
(TXT) w3m dump (www.ibtimes.co.uk)
| mountainriver wrote:
| Do folks think that this was utter negligence by the VCs, or just
| a pump and dump?
| fakedang wrote:
| Not just VCs. Microsoft was an investor too.
| pyman wrote:
| Microsoft invested PS250M in Inflection AI, PS250M in
| Builder.ai, and has backed several other companies working on
| LLMs. They've been placing strategic bets across the AI
| space, but only a few of those companies actually had the
| talent, infrastructure, and funding needed to build real
| models.
|
| The VP of AI was Craig Saunders, the same person who helped
| create Amazon Alexa. The problem is, they ran out of money.
| $500 million sounds like a lot, but it's not even close to
| what you need to build and train a real LLM. You need
| billions. Most people just don't realise that.
|
| See: https://www.businesswire.com/news/home/20240611122778/en
| /Bui...
| seanp2k2 wrote:
| ...and given the massive success of Amazon Alexa...
| alephnerd wrote:
| For every investor in Builder, there were multiple that passed.
|
| Notice how (aside from MS) most participants were not
| experienced Enterprise SaaS or AI/ML investors.
| s1artibartfast wrote:
| neither? Negligence doesn't make sense because it was the VCs
| own money- no duty to care. It doesn't seem like anyone cashed
| out either.
|
| Seems like a bad bet that went south.
| sib wrote:
| >> Negligence doesn't make sense because it was the VCs own
| money
|
| Almost definitionally, VCs are investing someone else's money
| (the people providing the capital are called the "limited
| partners" (LPs); the VCs who raise and invest the money are
| "general partners" (GPs).) The LPs are often pension funds,
| university endowments, and charitable organizations.
|
| Yes, GPs do typically have a capital contribution
| requirement, but it's generally in the area of 1% of the
| fund, so the vast majority of what VCs are investing is other
| people's money, for which they definitely have fiduciary
| responsibility.
| s1artibartfast wrote:
| That's fair.
| petesergeant wrote:
| I dunno, there's a world where this ends differently, and the
| company was liquid for six more months and transitioned to
| "actual" AI instead, having already built the customer base and
| sales channels, and everyone's happy. Launching your AI product
| before the AI works appears not to be especially unusual and is
| only a problem if the money runs out before you finish building
| the AI.
| flowerthoughts wrote:
| There's a more-or-less useful adage in investing: scared money
| don't make money.
|
| Startups will always carry a risk, and VCs are not betting that
| the company will be asymptotically good, just good enough to
| make an exit.
| compiler-guy wrote:
| And even more than that, just that some company they invest
| in will be a winner. It's OK for most to fail, as long as one
| of them does well. So they invest in lots of long-shots.
| MegaButts wrote:
| > VCs are not betting that the company will be asymptotically
| good, just good enough to make an exit.
|
| This is a misunderstanding of VC investment. Any competent VC
| expects most of their investments to go to zero. They're
| hoping a small percent of their investments will make up for
| the losses. The goal of a decent VC isn't to avoid bad
| investments so much as it is to make sure they get one good
| investment. A good investment in AirBnB/Google/Facebook will
| make up for dozens of speculative bets that go to zero.
| Ancalagon wrote:
| Really weird considering how much AI is actually available now
| immibis wrote:
| Almost like it doesn't work as well as they market it as
| working?
| klipt wrote:
| Not all companies are equal.
|
| At the same time that Tesla was making actual electric cars,
| Nikola was rolling fake "electric trucks" downhill.
|
| Grifters exist, but not everyone is a grifter.
| Supermancho wrote:
| Capitalism rewards dishonesty. Every company is a grifter
| to some degree. This is more widespread in technical
| service companies.
| sib wrote:
| It's a wonderful thing that no other economic systems
| reward dishonesty.
|
| /s
| Supermancho wrote:
| >>> Grifters exist, but not everyone is a grifter.
|
| >> Capitalism rewards dishonesty.
|
| > It's a wonderful thing that no other economic systems
| reward dishonesty.
|
| This is a whataboutism. To rephrase, "all economic
| systems reward dishonesty." - That's the point. Saying
| not every market participant is a grifter is a form of
| denial.
| deadeye wrote:
| To an extent. Just not to the extent that dishonesty is
| rewarded in socialism and communism.
|
| At least Capitalism in a free society is largely self
| correcting.
| burnte wrote:
| Capitalis does no such thing, the market available to the
| company does. Every problem people blame on "capitalism"
| is solvable with appropriate regulation. That's literally
| the point of regulation, too. Dozens of other countries
| show you can have a vibrant economy that isn't beholden
| to a few billionaires.
| jampekka wrote:
| > Every problem people blame on "capitalism" is solvable
| with appropriate regulation.
|
| Capitalism makes capitalism hard to appropriately
| regulate. Concentration of capital means concentration of
| power.
| burnte wrote:
| > Capitalism makes capitalism hard to appropriately
| regulate. Concentration of capital means concentration of
| power.
|
| And yet many countries have a better handle on it than
| the USA. I just never, ever buy into the whole "it's to
| hard for America to do a thing that other countries do".
| I think the US is capable of anything we put our
| collective will towards, we just need leaders who want to
| lead the whole nation rather than personal profiteers.
| jampekka wrote:
| The general trend has been towards deregulation, and
| capital concentration, almost everywhere for decades. US
| is just ahead.
|
| The talk in EU is now that we have to ease regulation
| because we can't compete with countries with laxer
| regulation. The same race to the bottom has happened in
| e.g. taxes and labor protections ever since capital
| controls were lifted.
|
| > I think the US is capable of anything we put our
| collective will towards, we just need leaders who want to
| lead the whole nation rather than personal profiteers.
|
| I sure hope so but I can't really see it happening. The
| whole US political system seems to be FUBAR, largely
| because the concentrations of capital bought it.
| otherme123 wrote:
| Capturing the regulators is a great way to make yourself
| immune to market pressure.
| surgical_fire wrote:
| > Capitalis does no such thing, the market available to
| the company does. Every problem people blame on
| "capitalism" is solvable with appropriate regulation
|
| Too bad that capital owners deeply hate regulation and do
| everything they can to deregulate everything.
|
| Hell, it doesn't even need to be capital owners. Plenty
| of bootlickers here on HN that always cry about any kind
| of government regulation.
| Supermancho wrote:
| > Capitalis does no such thing,
|
| I think it's obvious that this is incorrect. Part of
| regulation is to try and curtail grifting. It is not
| possible to prevent it and is the tendency of the system.
| burnte wrote:
| Not being able to eliminate it doesn't mean controlling
| it is impossible or that we shouldn't try. In any system
| there will be cheaters, it's how you deal with it that
| counts. A well regulated economy makes wealth spread
| around.
| ahazred8ta wrote:
| In eastern europe (COMECON) during the cold war days, the
| factories were famous for cranking out products that
| claimed to do something but did not deliver on the
| promise. Did they do that because they were run by
| capitalists?
|
| Google China melamine contaminated milk.
| AngryData wrote:
| I find it hard to believe any claim that they weren't
| capitalists. Almost nothing in the USSR was operated or
| managed by worker collectives. Nor in China. A handful of
| people managed the capital of these businesses and
| profited off them, and the people who own, operate, and
| profit off of capital investments are capitalists, even
| if they slap a PR sign up claiming they aren't.
| earnestinger wrote:
| Technically you are wrong. The best kind of wrong.
| mjmsmith wrote:
| Not sure Tesla is the poster child for non-grifters in the
| context of AI.
| andrei_says_ wrote:
| Or "auto pilot"
| lotsofpulp wrote:
| Auto pilot is pretty good at driving within the same
| lane. Just like a plane pilot needs to do the more
| complicated stuff like take off and landing, one can
| expect the same with autopilot (just changing lanes and
| stopping at lights or stop signs or turning).
|
| Full self driving is the mislabeled one. Should be "90%
| self driving".
| seanp2k2 wrote:
| Not when that lane is the HOV lane and traffic is going
| (speed limit + 15mph). You can always spot the white
| Tesla on 101 doing the speed limit in the HOV lane during
| rush hour with a mile of cars behind them and a mile of
| nothing in front.
| lotsofpulp wrote:
| The driver can set the auto pilot speed to whatever
| number they want. If they are going the speed limit, it's
| because the driver chose to cruise at that max speed.
|
| Full self driving, however, may be limited to the speed
| limit. I don't know, since I don't use it.
| pixl97 wrote:
| > plane pilot needs to do the more complicated stuff like
| take off and landing
|
| Auto landing test 3 days ago.
|
| https://www.youtube.com/watch?v=eijEPsSdqg8
| bufferoverflow wrote:
| How are they grifters? Tesla gave us FSD to try for free
| for a month, twice now. If you don't like its
| performance, don't pay.
| seanp2k2 wrote:
| _Elon Musk Predicts Level 4 Or 5 Full Self-Driving 'Later
| This Year' For the Tenth Year In A Row_
|
| (2023) https://www.theautopian.com/elon-musk-predicts-
| level-4-or-5-...
|
| https://dictionary.cambridge.org/us/dictionary/english/gr
| ift ways of getting money dishonestly
| that involve tricking someone
|
| So, they _got money dishonestly_ by _tricking someone_
| into buying their cars based on the belief that they 'd
| offer real full self driving now or very soon, then they
| didn't actually deliver that.
| jampekka wrote:
| Coast-to-coast self-driving Teslas were promised by 2017.
| And have been promised next year almost every year since.
|
| Tesla can make electric vehicles but the company valuagion
| is based on grift.
| wongarsu wrote:
| If you have an idea for a cool AI startup it's faster to build
| your first prototype without the actual AI, just faking that
| part. But if your Actual Indians had 95% accuracy and you can't
| get an AI to do more than 85% then you are kind of stuck if you
| raised money and got customers pretending that your Actual
| Indians are Artificial Intelligence.
| TYPE_FASTER wrote:
| This is the way. Funny how AI could also stand for Actual
| Intelligence. Or, Artisanal Intelligence? "Now 100% organic
| handcrafted thoughts, unique for your business problem."
| cubano wrote:
| How about Anal Inclusion?
| more_corn wrote:
| Not true it's super easy to fine tune and deploy one of the
| open models. I should teach a course.
| mrweasel wrote:
| Also it can't have been fast. Didn't customers and investors
| feel that it was weird that CoPilot spits out code as fast as
| you can type, but Builder.ai needs days or weeks to generate
| your app. Or where these Indian developers just really really
| fast?
| givemeethekeys wrote:
| Maybe they use GPT :)
| helloplanets wrote:
| There's this one super secret agentic framework that beats
| all the benchmarks...
| hyperadvanced wrote:
| Available sure, but cost effective? My guess is that they tried
| a lot of things to get ChatGPT to work and burnt out of money
| before it got cheap enough to fit with a reliable business
| model. Early but not wrong, I guess.
| Havoc wrote:
| I've read indications that this was always aimed at hybrid model
| rather than pure AI, but hard to tell now because all the news is
| on this indians train.
| bboygravity wrote:
| That makes more sense, would explain the unbelievable clickbait
| headlines (as usual).
| giarc wrote:
| Not only that..."The deception wasn't new. As early as 2019,
| The Wall Street Journal exposed Builder.ai's questionable AI
| claim revealing that the platform relied heavily on human
| contractors rather than artificial intelligence."
| rafram wrote:
| Article from a slightly better source:
| https://timesofindia.indiatimes.com/technology/tech-news/how...
| pyman wrote:
| This is fake news. Builder.ai, like any other dev shop, had
| clients and was building apps using developers in India, pretty
| much like Infosys or any other Indian dev shop. Nothing wrong
| with that.
|
| From what I read online, the real issue was "Natasha", their
| virtual assistant powered by a dedicated foundation model. They
| ran out of money before it got anywhere.
| bartread wrote:
| > This is fake news. Builder.ai, like any other dev shop, had
| clients and was building apps using developers in India,
| pretty much like Infosys or any other Indian dev shop.
| Nothing wrong with that.
|
| Yeeeah... that's a fairly disingenuous take.
|
| The difference between every other offshore dev shop backed
| by developers in India and Builder.ai is that - and I say
| this as someone who thinks Infosys is a shit company -
| Infosys and all those other dev shops are at least up front
| about how their business works and where and who will be
| building your app. Whereas Builder.ai spent quite a long time
| pretending like they had AI doing the work when actually it
| was a lot of devs in India.
|
| That is deliberately misleading and it is not OK. It's
| fraudulent. It's literally what Theranos did with their
| Edison machines that never worked so whereas they claimed
| they had this wondrous new blood testing technology they were
| actually running tests with Siemens machines, diluting blood
| samples, etc. The consequences of Theranos's actions were
| much more serious (misdiagnoses and, indeed missed diagnoses
| of thousands of patients), rather than just apps built by
| humans rather than AI, but lying and fraud is lying and
| fraud.
| profsummergig wrote:
| This is so obviously fake news that it's a good litmus test
| of the people who are boosting it.
|
| There's no way that a team of programmers can ever produce
| code quickly enough to mimic anything close to the response
| time of a coding LLM.
| threeseed wrote:
| But it's not just about coding quickly but also correctly.
|
| Coding LLMs do not solve the problem of it hallucinating,
| using antiquated libraries and technologies and screwing up
| large code bases because of the limited context size.
|
| Given a well architected component library and set of
| modules I would bet that on average I could build a correct
| website faster.
| sva_ wrote:
| Also
| https://www.bloomberg.com/news/articles/2025-05-30/builder-a...
| gamblor956 wrote:
| Have been joking with friends that "AI" stand for "Actually
| Indians".
|
| We never thought that it wasn't just a joke...
| ceejayoz wrote:
| See also: Amazon Go. https://www.businessinsider.com/amazons-
| just-walk-out-actual...
| profstasiak wrote:
| many such cases
| fazkan wrote:
| This is so weird, its not that hard to actually build an app
| builder. There are multiple open-source repos (bolt etc), they
| could have just paid their "AI engineer" to actually build an AI
| engineer.
|
| Shameless plug, but we built (https://v1.slashml.com), in roughly
| 2 weeks. Granted its not as mature, but we don't have billions :)
| glutamate wrote:
| They launched in 2016
| throwaway314155 wrote:
| Should have pivoted faster.
| hnuser123456 wrote:
| Nice, I'll try this out tonight.
| fazkan wrote:
| thanks, do ping me if you run into any issues
| faizank@slashml.com
| xkcd-sucks wrote:
| It's plausible they started with a typical software consultancy
| and its crappy in house app builder scripts, and reformed it as
| an AI thing in order to inflate its value?
| downrightmike wrote:
| That'd be shameful, and a complete disgrace, it'd be like
| adding "bitcoin" to your company name or 10k fillings a few
| years ago to boost your stock
| fazkan wrote:
| I mean zapier is also calling their workflows, "agents", I
| remember someone ranting about it on twitter.
| mikestew wrote:
| In case anyone thinks parent is speaking hypothetically:
|
| _Insider trading charges filed over Long Island Iced Tea's
| blockchain 'pivot'_
| https://www.cnn.com/2021/07/10/investing/blockchain-long-
| isl...
| 1oooqooq wrote:
| worked for GameStop
| driverdan wrote:
| > its not that hard to actually build an app builder
|
| Besides simple one page self-contained apps, yes, it's quite
| hard. So hard that it's still an unsolved problem.
| nadermx wrote:
| https://v0.dev?
| fazkan wrote:
| not really, lovable, v0, and bolt all are mutlipage. They
| connect to supabase for db and auth. Replit can spinup custom
| dbs on-demand, and have a full-fledged IDE.
|
| I did my research before jumping into this space :)
| belter wrote:
| Beaten to death: https://hn.algolia.com/?q=Builder.ai
| joshuahedlund wrote:
| This looks like the first submission to get traction on this
| latest development.
|
| Thanks for the search though:
|
| > https://news.ycombinator.com/item?id=30397201
|
| This one from 3 yrs ago had some interesting comments
|
| > off topic, but they have a very suspect pricing page:
| https://www.builder.ai/studio-store
|
| > "Delivery: 12 weeks"
|
| > is Builder.ai just a CRUD app for indian sweatshops to build
| the apps?
|
| > > It would not have spawned an entire industry and no code
| websites every other week or so if it was 'just a CRUD app'.
| andrewinardeer wrote:
| AI = Actual Indians, apparently.
| CobrastanJorji wrote:
| Yep. Also happened with Amazon's "Just Walk Out Technology:"
| https://www.businessinsider.com/amazons-just-walk-out-actual...
| dmazin wrote:
| My understanding is this turned out not to be true. People
| were used to label stuff for new stores, but the actual
| implementation did not depend on some sort of fakery.
| CobrastanJorji wrote:
| I imagine it's possible the truth was somewhere in between.
| But if it worked, why did they stop using it in their
| grocery stores after putting so much money into it?
| martinald wrote:
| In the UK at least the grocery stores are completely
| empty. I've barely seen anyone in them. Bizarrely they
| are shutting loads down in London but opening new ones at
| the same time. Absolutely no idea what the strategy is,
| they must be throwing out the majority of the fresh food
| stock they have.
| rrrrrrrrrrrryan wrote:
| That was the original idea, and that's what Amazon claimed,
| but IIRC they never got over 70% automated.
|
| Phrased differently, 30% of all transactions were still
| entered by a human overseas watching cameras at the time
| they decided to pull the plug, years after the initial
| launch.
| kylecazar wrote:
| Interesting that they can automate some of the
| transactions and not others... Wonder what was special
| about those other 30%.
|
| There was a 2 year period in which I bought lunch at an
| Amazon Go daily. I was naive to the magic so I thought it
| was the greatest innovation ever.
| vel0city wrote:
| I wish more stores would just do something like Scan and Go
| at Sam's Club. By far the smoothest checkout experience I've
| ever used.
|
| https://tech.walmart.com/content/walmart-global-
| tech/en_us/b...
| thatguy0900 wrote:
| I wonder if that only really works becuase Sam's club can
| just revoke your membership if you steal
| mikestew wrote:
| Apple stores work the same way, except that it is truly
| "scan and go", whereas Walmart makes you show a digital
| receipt. What happens if you steal? I dunno, without
| checking I'm pretty sure you need an Apple account to use
| the app, so maybe that gets revoked. Or maybe Apple's
| stuff simply works well enough.
| vel0city wrote:
| At least at Sam's, cameras glimpse in your cart and seems
| to apply some kind of trust score. Usually, the person at
| the exit just waves me by, sometimes if the cart is
| really loaded with odd items or I've already bagged some
| things they'll want to take a peek.
| RollingRo11 wrote:
| I remember being 13 years old and stepping into an Amazon Go
| store in Seattle. Little me lost my mind. I think I walked in
| and out of the store like 5 times just to see the amazon
| charge. Sucks that half of the magic was a lie.
|
| Shame to see another project fall to the strategy of AI =
| "actually indians". I wonder how many other companies have
| engaged in this stuff.
| pyman wrote:
| See: https://www.businesswire.com/news/home/20240611122778/
| en/Bui...
| calmbell wrote:
| Depends on how you define real. I would argue that GPT-2
| was a real LLM and it almost certainly cost a lot less
| than a billion. I'm sure there are much better examples.
| pyman wrote:
| Can you imagine Builder.ai using a model that argues with
| their clients or discriminates against them? I don't
| think so. GPT-2 is like bringing a knife to a gunfight in
| 2025.
|
| If you want to compete with the likes of GPT-4, Claude,
| or Gemini today, you're looking at billions, just for
| training, not counting infra, data pipelines, evals, red
| teaming, and everything else that comes with it.
|
| Builder.ai wasn't able to use GenAI to actually build
| software. And when the money ran out and no model was
| ever announced, investors lost trust and clients lost
| patience.
| davidst wrote:
| [Disclaimer: Former Amazon employee and not involved with Go
| since 2016.]
|
| I worked on the first iteration of Amazon Go in 2015/16 and
| can provide some context on the human oversight aspects.
|
| The system incorporated human review in two primary
| capacities:
|
| 1. Low-confidence event resolution: A subset of customer
| interactions resulted in low-confidence classifications that
| were routed to human reviewers for verification. These events
| typically involved edge cases that were challenging for the
| automated systems to resolve definitively. The proportion of
| these events was expected to decrease over time as the models
| improved. This was my experience during my time with Go.
|
| 2. Training data generation: Human annotators played a
| significant role in labeling interactions for model
| training-- particularly when introducing new store fixtures
| or customer behaviors. For instance, when new equipment like
| coffee machines were added, the system would initially flag
| _all_ related interactions for human annotation to build
| training datasets for those specific use cases. Of course,
| that results in a surge of humans needed for annotation while
| the data is collected.
|
| Scaling from smaller grab-and-go formats to larger retail
| environments (Fresh, Whole Foods) would require expanded
| annotation efforts due to the increased complexity and
| variety of customer interactions in those settings.
|
| This approach represents a fairly standard machine learning
| deployment pattern where human oversight serves both quality
| assurance and continuous improvement.
|
| The news story is entertaining but it implies there was no
| working tech behind Amazon Go which just isn't true.
| thomassmith65 wrote:
| Yes, this article's full title is "Builder.ai Collapses: $1.5bn
| _' AI'_ Startup Exposed as _' Actually Indians'_ Pretending to
| Be Bots"
| blitzar wrote:
| Whats the process for hallucinations? Do 1 in 10 of each of the
| workers have to be tripping on shrooms all shift?
| nickdothutton wrote:
| No, lack of sleep.
| blitzar wrote:
| Elegant cost saving (or redistribution of drugs to head
| office) solution.
| bluefirebrand wrote:
| No they're just extremely low paid overseas workers
| scrambling to do work fast enough that it looks like "AI"?
| DebtDeflation wrote:
| It's happening in every industry. CEOs moving back office jobs
| to India and telling Wall St they replaced the jobs with "AI"
| to get a stock price boost. I'm convinced this dynamic is a
| major cause of the "white collar recession" we're experiencing
| now. Perhaps the intent is to eventually replace the Indians
| with AI (Artificial Intelligence), but right now it's very much
| AI (Anonymous Indians) doing the work.
| goatlover wrote:
| Is this how the Trump administration imagines bringing jobs
| back to America by not regulating tech companies?
| kristianc wrote:
| GenAI.. generate another Indian..
| perryh2 wrote:
| Similar to EvenUp: https://www.businessinsider.com/evenup-ai-
| errors-hallucinati...
| pkkkzip wrote:
| Definitely not helping stereotypes
| terminatornet wrote:
| speak on that
| rdtsc wrote:
| > Linas Beliunas, Director of the financial company Zero Hash,
| recently exposed that Builder.ai lacked true AI, instead
| utilising a group of Indian developers who were merely pretending
| to be bots writing code.
|
| They probably had to train people to talk like ChatGPT.
|
| Step 0: Make sure you have an em dash shortcut on your keyboard
| and use that as often as possible.
|
| Step 1: Be extremely polite and apologize profusely.
|
| Step 2: ...
| zingababba wrote:
| Step 2: Do the needful
| TZubiri wrote:
| Probably they just wrote code and that was fed into an LLM
| which LLMified the responses.
| felineflock wrote:
| Not to confuse with builder.IO - poor founder was posting these
| days "FOR THE LAST TIME GUYS THIS IS A DIFFERENT COMPANY".
| seydor wrote:
| actually he should buy the bankrupt name and be the same
| company
| nikcub wrote:
| I expect the builder.ai story will break into the mainstream
| via a book / documentary. There are some insane details and
| it's the first large-scale AI hype failure - which people are
| hungry to get the details on - and some big names involved.
|
| Another failure of dd - I really wonder how high-profile
| investors pour hundreds of millions into a co without doing
| something simple like ordering an app using a burner account.
| ethbr1 wrote:
| > I really wonder how high-profile investors pour hundreds
| of millions into a co without doing something simple like
| ordering an app using a burner account.
|
| You'd think that if you're investing $1M+, there's budget
| for at least getting an intern / assistant to do that.
| pyman wrote:
| Microsoft invested PS250M in Inflection AI, PS250M in
| Builder.ai, and has backed several other companies
| working on LLMs. They've been placing strategic bets
| across the AI space, but only a few of those companies
| actually had the talent, infrastructure, and funding
| needed to build real models.
|
| The VP of AI was Craig Saunders, the same person who
| helped create Amazon Alexa. The problem is, they ran out
| of money. $500 million sounds like a lot, but it's not
| even close to what you need to build and train a real
| LLM. You need billions. Most people just don't realise
| that.
|
| See: https://www.businesswire.com/news/home/2024061112277
| 8/en/Bui...
| trilbyglens wrote:
| This is why I think ai is basically the death of startups
| as we know them. Only big players can even take a swing.
| No more underdog garage startups, unless you're just
| downstream getting dorty bath water from the big boys.
|
| Ai all around is purely about consolidation of power and
| money. It's bad for workers and ultimately probably bad
| for the startup world and competition more broadly.
| pyman wrote:
| I agree. The infra side is dominated by VCs and big
| players. And the data is in the hands of regulators, who
| are looking the other way.
| ricardobeat wrote:
| DeepSeek cost just over $5M to train. StarCoder cost
| around $1M, there is no info for Starcoder2 but unlikely
| to be more than a few million. The idea of spending
| billions in training is OpenAI trying to build a moat
| that might not actually exist.
| pyman wrote:
| These architectures didn't exist last year. The Chinese
| are innovating thanks to massive government backing,
| access to talent, and a clear focus on winning the AI
| race.
| ricardobeat wrote:
| Starcoder was released in 2023, by french/american
| companies, and there were other coding models before it.
|
| That was right around the time this company had a new
| $250M funding round, so lack of resources to invest in
| actual AI is a terrible excuse.
| pyman wrote:
| StarCoder is an open-source LLM for code, not text.
| Builder.ai told investors they were building a virtual
| assistant called "Natasha", not a code assistant.
|
| I'm just telling you what I read online. Builder.ai
| wasn't competing with GitHub Copilot, Cody, or
| CodeWhisperer. Those are code assistants for developers.
| Builder.ai was building a virtual assistant for
| customers. It meant to "talk" to clients, gather
| requirements and automate parts of the build process.
| Very different space.
|
| And like I said before, creating a dedicated, pre-trained
| foundation model is expensive. Not to mention a full LLM.
| SteveNuts wrote:
| >You'd think that if you're investing $1M+, there's
| budget for at least getting an intern / assistant to do
| that.
|
| Or having an AI Agent do it...
| bobthepanda wrote:
| maybe this is the first large solely AI failure but
| algorithms and AIs have done lots of damage before. There
| have been flash crashes on Wall St, Zillow lost $1B using
| an algorithm to try and house flip, Klarna is circling the
| drain after hyping up AI, etc.
| seanp2k2 wrote:
| Opening up gTLDs was a mistake.
| mkl wrote:
| Both those are ccTLDs.
| koakuma-chan wrote:
| Oh no, qwik was my favourite JavaScript framework
| zachncst wrote:
| Isn't this what they always tell startups to do? Fake it and get
| product market fit. I recall the stories of task rabbit where the
| founder was delivering all the meals.
| pyman wrote:
| See:
| https://www.businesswire.com/news/home/20240611122778/en/Bui...
| tacheiordache wrote:
| You say that as if Amazon Alexa was some kind of amazing
| product. t succeeded because it has Amazon backing and it's
| kindof a crappy product.
| oblio wrote:
| All voice assistants, at least the original iterations, are
| only good for 3-4 trivial things people actually want. And
| they've been around for a decade at this point.
| sokoloff wrote:
| It's a kitchen timer, music player, and weather sayer.
|
| That's surely worth the $30 I paid.
| jaymzcampbell wrote:
| I had to laugh, these are literally the only three things
| my wife and I use ours for. At a stretch, I'll count the
| multi-room speaker sync as a great value add to the OOTB
| audio playback. Anything else, forget it.
| codegrappler wrote:
| Don't forget grocery list add-er!
| Yeul wrote:
| I will never talk to a computer until they are sentient.
| Gothmog69 wrote:
| What makes it crappy? I find it really good at voice
| detection
| mrtksn wrote:
| IMHO you are not supposed to fake your core value proposition
| when taking money. If the AI part was an implementation detail
| probably wouldn't have been a problem.
| Aurornis wrote:
| "Fake it till you make it" was about presenting yourself as an
| established, stable company to overcome objections about using
| a startup. Things like having a "Customer Support" phone number
| and e-mail address that just go to the founders, for example.
| It's fair game if the founders are actually picking up the
| phone and doing customer support, and it overcomes one
| objection people might have about using a startup instead of a
| big company.
|
| Claiming you can do something specific (use AI to do something)
| and then using humans to do the labor is something else
| entirely. If you raise money on that, it's just fraud.
| MangoToupe wrote:
| There's a good deal of grey-area there, for instance in
| faking user activity in social media startups. Reddit did
| this for instance, although I don't know if they reported
| active user numbers as part of fundraising.
| Aurornis wrote:
| If Reddit create a material number of fake accounts and
| reported those as a key metric for fundraising, that would
| be fraud.
|
| I think the story has been exaggerated a lot, though. The
| original story was that the admins were doing real
| submission activity (links, etc.) but they had a mechanism
| to create a new user account with the submission. So they
| created a lot of new user accounts for themselves, but the
| activity was real and driven by the founders.
|
| We all have test accounts on our production systems. If
| it's a tiny number of the overall users at time of
| fundraising it doesn't matter. On the other hand if they
| created 10,000 accounts and then claimed they had 11,000
| users that would be blatant fraud. I really don't think
| they did anything like that, though. I think they seeded
| the very initial site with content and made different
| "accounts" for it, but by the time they raised they had
| real traffic.
| spwa4 wrote:
| ... and what if Twitter does it?
|
| Because at the very least they killed most
| countermeasures to bots and a serious percentage of
| activity on twitter is "fake engagement".
|
| I also have a much more difficult question: Could you
| explain how this fraud works/applies if nation states are
| the ones developing the bots? Is there a difference
| between foreign and US bots?
| Aurornis wrote:
| It's not complicated. If a company knowingly
| misrepresents their user activity then it's fraud.
| Knowing that a significant portion of your user activity
| is bots but then claiming you don't have bots would be
| fraud.
| snowwrestler wrote:
| Most people on web forums or social media sites are
| browsing, reading, watching. Only a small percentage are
| posting UGC, user-generated content.
|
| So when founders are starting a new site, they need to
| bootstrap by getting enough content in there to drive
| browsing. Only then will the audience grow, and only then
| will users start to post their own stuff. This is what
| Reddit did, and it's not unique to them. YouTube's founders
| did the same thing when they started.
|
| Note that this is not "fake it til you make it." This is
| investment in audience growth.
| drewda wrote:
| "Do things that don't scale" to quote Sir PG.
| ricardobeat wrote:
| So.. where did the $450M go? A team of 700 developers in India
| built over eight years would have cost a fraction of that.
| monksy wrote:
| The Chai budget is completely justifiable expense. (Probably
| more so than the difference being run away with)
| more_corn wrote:
| They spent $400M on hookers and drugs. The rest they
| squandered.
| pryelluw wrote:
| $400M!
|
| I get $100M. Maybe even $200M.
|
| But $400M?
|
| Unforgivable.
| nadermx wrote:
| You figure 700 employees. 400m. Avg cost per hooker can't
| be more than a few hundred.
|
| So by this math each employee got 1,900ish hookers. Since i
| figure male hookers for the female employees where cheaper
| well round up to 2,000.
|
| That is in fact unforgivable. 1,000 would of been
| acceptable. 2,000... just excess
| pryelluw wrote:
| Did you factor in the nose candy?
|
| That estimate seems off. Please crunch the numbers once
| again. Make sure to factor in inflation.
| kridsdale1 wrote:
| Shit, those benefits are way better than Suicide Bomber.
| CSMastermind wrote:
| How do you figure? $450M / 8 years / 700 developers = $80k /
| year per developer.
| casion wrote:
| Average salary for a developer in India is about 1/10th of
| that.
| darth_avocado wrote:
| Median salary of a reasonable developer is about 1/2th of
| that and if you are talking about Microsoft, Uber, Google
| etc., then that's the salary of a senior dev.
|
| https://www.levels.fyi/t/software-
| engineer/locations/greater...
|
| But more importantly, we're all pretending, the only cost
| of building anything is salaries. A company that size could
| blow a million dollars a month just on AWS, and the AI
| stuff is waaaay more expensive.
| bigfatkitten wrote:
| Only if they're all ex FAANG staff/principal.
| cubano wrote:
| Typically, scams like this are very top-heavy with the vast
| majority of the pilfered cash going to a few well-placed
| "bros" at the top of the company pyramid.
|
| My guess? Most of the cash is socked away in BTC or some such
| wealth sink just waiting for the individuals to clear their
| bothersome legal issues.
| rokob wrote:
| Why do you think it would be to pay for actual costs? The whole
| point of running a scam is to spend the money.
| antithesizer wrote:
| I really wish I'd read this before starting my career as a
| scammer ten years ago.
| pyman wrote:
| Elon Musk spent $6 billion training his model. Sam Altman spent
| $40 billion. Where did Builder AI's $500 million go? Probably
| into building a foundation model, not even a full LLM.
| 1oooqooq wrote:
| shhhh. we don't talk about the ongoing scams. those you keep
| hyping and try to sell your SaaS around it.
| tartoran wrote:
| What happens with all the money they collected from investors?
| Was it all just squandered away? Pocketed?
| xyst wrote:
| The Theranos of AI. What a joke.
| LeicaLatte wrote:
| Do things that don't scale taken to another level :)
| Yeul wrote:
| Honestly I feel bad for Indians but yeah everything annoying
| comes from them. Scamming, call centers and worst of all
| Microsoft agents.
| orochimaaru wrote:
| Scamming is Cambodia via the Chinese triad. That's where all
| the scam farms are.
|
| There's a lot of poor Indians forced into slave labor
| conditions there by tricking them into job opportunities. But
| there is not a lot of call center scams run today in India. Not
| at the scale at which Cambodia runs them.
| moralestapia wrote:
| The elephant in the room is how many builder.ai(s) are still out
| there.
|
| My personal estimate is that it is about 80% of the startups you
| see around.
| bigfatkitten wrote:
| The WITCH consultancies make tons of money delivering code of
| similar quality without pretending that it was done by AI.
| anal_reactor wrote:
| In this whole AI revolution we sometimes forget the power of
| cheap human labour... and if I recall correctly, that's not the
| first time such a thing happens. Amazon made a "no-checkout AI
| automated store" which was a bunch of cameras connected to a
| bunch of Indians. At this point, I think we should consider
| "Indians" a valid element of any engineering architecture,
| because they perfectly fill the niche where you have work that is
| almost easy to automate, but not quite.
|
| Of course, "Indian-as-a-Service" doesn't sound as cool as AI, but
| besides this, I think it's a valid solution and a business model
| for many use cases.
| axus wrote:
| https://en.wikipedia.org/wiki/Amazon_Mechanical_Turk ,
| "conceived by Venky Harinarayan in a U.S. patent disclosure in
| 2001".
| pfdietz wrote:
| That's a big trenchcoat.
| bartread wrote:
| This is not news, or at least not fresh news. The FT reported the
| collapse ~9 days ago and it was discussed here:
| https://news.ycombinator.com/item?id=44080640
| apsurd wrote:
| news to me buddy. this is perhaps a useless comment but then i
| think, articles resurface every now and again and it's
| intentional and welcome for those that missed. and this isn't
| exactly that of course, rather makes me think it's worth a
| comment: news is relative. discussion ensues, it's all good
| ManBeardPc wrote:
| Another AI scam. Wasn't there a similar case with the Amazon
| stores? Just walk out I think. Could be understood as sound
| advice if someone pitches you something groundbreaking done by
| AI.
| cubano wrote:
| We wanted flying cars, but instead got fake AI.
|
| Shameful.
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