That’s the headline on my most recent story, an exclusive out Tuesday with my colleagues Mark Bergen and Yazhou Sun.
It begins: 
<– gift link
Builder.ai lowered the sales figures it provided to investors and hired auditors to examine its last two years of accounts, a major setback for the artificial intelligence startup backed by Microsoft Corp. and the Qatar Investment Authority.
The London-based company, which has raised more than $450 million, dropped its revenue estimates for the second half of 2024 by about 25% after some sales channels “did not come through,” according to Manpreet Ratia, the recently appointed chief executive.
Builder.ai confirmed the adjustment, which it began making last summer but hasn’t previously been reported, in response to questions from Bloomberg News about the sales correction and concerns from former employees that the company inflated sales figures.
“It’s probably time to sit back and take pause,” Ratia said in his first interview as CEO of the nine-year-old company, which helps businesses create customized apps with little to no coding. “We need to do a little bit of work making sure we get our house in order.”
The company’s missteps show the risks inherent in the rush to back promising AI startups, as investors seek to replicate the success of companies like OpenAI or Anthropic. After the debut of ChatGPT, the company rode investor enthusiasm for AI startups, raising from backers including Microsoft and the Qatar Investment Authority, which led a $250 million financing round in 2023.
Click through to read the rest.
