Builder AI, a London-based startup once valued at $1.5 billion and backed by major technology companies including Microsoft, has filed for bankruptcy after revelations that it misled investors about its artificial intelligence capabilities. The company marketed itself as a no-code, AI-powered app development platform but was found to rely on 700 human engineers working in India to perform tasks it claimed were automated by AI. Builder AI had raised over $445 million from investors before its collapse. The incident has drawn attention amid a broader surge in AI investment, with tech giants increasing funding for advanced chatbot technologies and voice AI solutions that have demonstrated measurable sales improvements. Venture capital firms like Andreessen Horowitz continue to study and support the future of consumer AI, emphasizing flexible AI deployment models and long-term returns in the sector.