The US federal government is scrutinizing UK-based AI startup Builder.ai, a company backed by Microsoft and once valued at over $1 billion. The investigation revolves around potential fraudulent sales practices and significantly inflated revenues, which the company reported to investors. builder.ai’s General Counsel Adi Vinyarsh has requested employees preserve relevant documents as part of the subpoena from the US Attorney’s Office for the Southern District of New York. This follows a series of financial irregularities leading to the ousting of former CEO Sachin Dev Duggal just weeks ago. Internal investigations reveal exaggerated revenue reports, highlighting that Builder.ai inflated sales projections by over 300%. The company has since seen its anticipated revenues cut drastically from $220 million to $55 million for 2024 and similarly lowered for 2023 to reflect the reality of the discrepancies. The investigation is centered on potential irregularities surrounding resellers in the Middle East, where authenticity of transactions was questionable. The company’s financial troubles, marked by a sharp decline in revenue projections, have led to insolvency proceedings initiated just days after receiving the subpoena. This marks the end of Builder.ai’s once-promising journey and reflects the potential risks associated with inflated claims in the fast-evolving world of AI.