“Please step off the plane, sir… and bring your Google Drive with you.” -The FBI to Builder.ai’s ex-CFO

Remember when Builder.ai was supposed to revolutionize app development with AI? Yeah, now it’s revolutionizing the FBI’s caseload.

Builder.ai was once the hot, Microsoft-backed “AI app factory” that claimed it could make software development as easy as ordering a pizza. Ironically, now it’s serving prosecutors a piping-hot slice of federal scrutiny. Makes sense though, when your books start looking like a magician’s hat (“and now, for my next trick… revenue!”), Uncle Sam tends to be at your front door asking for receipts pretty quickly.

(Source: Financial Times)

So what are the (alleged) charges? Builder.ai’s self-proclaimed “chief wizard,” Sachin Dev Duggal, promised to make building software as easy as ordering a pizza. Instead, prosecutors believe the company might’ve been cooking the books instead of code.

According to the Financial Times, the U.S. Attorney’s Office for the Southern District of New York has been poking around the company’s financials for months. They even subpoenaed the company’s ex-chief financial officer, Andres Elizondo… who was handed the paperwork mid-flight during a Dallas layover by the FBI. (Sounds like a deleted scene from Catch Me If You Can.)

Elizondo, who oversaw global finances from 2021 to 2023, was asked to appear before a Manhattan grand jury this fall. Prosecutors want everything from his emails to customer invoices, stretching all the way back to 2018… a time when Builder.ai was still going by its old name, Engineer.ai.

Oh, and the plot thickens… agents have reportedly been downloading company data straight from Builder.ai’s Google Cloud servers, digging into what insiders called “potentially bogus sales.” Translation: the company may have been airbrushing its revenue numbers the same way influencers edit vacation photos… just enough to make reality unrecognizable.

Among the red flags were reports of improperly booked discounts, circular transactions with “customers” that looked suspiciously like mirror trades, and tiny upfront deposits that somehow turned into full-blown sales on paper before quietly deflating in reality.

Of course, Builder.ai’s lawyers (and Duggal’s team) have denied any wrongdoing, insisting the numbers were clean. Meanwhile, the company’s “chief wizard” seems to have completely disappeared (which correct me if I’m wrong, but that’s usually not a good sign of innocence). The Microsoft-backed startup, once paraded around as a billion-dollar AI success story, imploded in May after an internal probe revealed its revenues were actually just a quarter of what it had been bragging about. Think about that… imagine checking your bank account and finding 75% of your balance missing… insolvency would sound pretty reasonable too.

That’s when the real fun began. By summer, the FBI and SDNY were knee-deep in the company’s records, tracing transactions and communications with everyone from current to potential creditors. (If there’s one thing prosecutors love, it’s a paper trail.)

With all that said, Elizondo isn’t currently considered a suspect… just a key witness in the ongoing probe. But when the feds start showing up at airports with subpoenas, you know things aren’t going to end well.

This might be the most ironic moment since Calm… the meditation app built to reduce stress… laid off 20% of its employees to “stay calm amid economic turbulence.” Builder.ai tried to build the future of software. Instead, it built a case file. And you can bet Satya Nadella just sent out a group slack to his executive team that reads: “Next time a startup pitches us with ‘AI’ in the name, just close the laptop.”

At the time of publishing this article, Stocks.News holds positions in Microsoft and Google as mentioned in the article.