"Built with AI" is the story that every founder dreams of: speed, funding, headlines. But just months after launch, the companies went dark. No support. No backups. No roadmap. Why? Because we still can't forget the human hands behind the scale software.
In May 2025, Builder.ai, a highly AI-driven software builder (backed by Microsoft nd the Qatar Investment Authority) filed for bankruptcy. Contrary to the company's marketed “AI-driven development” image, operations were conducted by a workforce of 700 engineers in India who manually wrote code designed to look machine-made or machine-generated. The collapse occurred after financial mismanagement, a $37 million loan clawback by their main lender, and inflated revenue claims, which triggered insolvency across five countries. (Startup Talky News, 2025).
Startups that trusted BuilderAI were left mid-development, unsupported, and vulnerable. Muhammad Umar, founder and startup advisor, shared a post about his client:
"Muhammad, they fired everyone. All 1500 employees. They're holding my code hostage. My startup will be dead in a matter of days. There's no one left to give me my code. The entire company is gone."
At MELT Studio, we build fast, but we don’t cut corners with AI. We know can accelerate your product, but it can’t replace your team.
Stuck after implementing AI? We provide project support. From maintaining to helping you find your product-market fit, we bring top-tier LatAm engineers, fractional CTOs, and nearshoring collaboration.