Builder.ai was then able to raise $75mn from some of its existing shareholders to try to fix its balance sheet, according to two people familiar with its finances.
I'm just trying to imagine the kind of funds or investor for who 75m dollars is just a comma in a report and that can give them so easily despite the obvious high probability to lose it.
Following the public reporting timeline of builder.ai lays out a fascinating story akin to Theranos or Wework. I'm sure we'll get an exhaustive account of exactly what happen in due course, and there will likely be other such cases that come out of the most recent AI investing boom.
Aug 2019 - WSJ report that for builder.ai the "AI" means "Actually people in India"
We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.
I interviewed with them a fair while back and noped out as soon as they told me their ‘tech leads’ were typically assigned to handling 15 or 16 projects at a time for around £70-80k a year. Interviewed an ex senior engineer of theirs who was still junior/mid really.
By all accounts it looked like another web dev sweatshop and it just used AI as bait.
Decided to just step back from it all. Most AI startups are all talk and no action. Long hours and weekends with nothing to show for it.
Hopefully it's a sign of the bubble starting to pop. This is the same situation we had in the late 90s with the dot-com bubble. Many companies built on hype with lackluster products. So much so that it became a meme with zombo.com. We need an AI-bubble equivalent parody product.
I feel like we’ve had two already with the Rabbit R1 and Humane AI Pin. So many company got funded with obscene amounts of money though, so I think we still have dozens more coming soon. Though I imagine a lot of them will be quieter failures having not even gotten to a product launch yet.
I don't think those are good examples, though. They were just ahead of their time, and poorly implemented. But an AI assistant that's accurate, immediately available, easier to use than a smartphone app, with better ergonomics, that integrates with other services ("agentic"), etc., is a billion-dollar idea. Someone will eventually crack this problem and produce a product that everyone will want. Just like Apple did with the iPhone, it will take a few years of lackluster products to get there. It's a matter of the tech getting good enough, affordable enough, and for someone to put the pieces together in the right package.
Google is pushing their Gemini to Android phones pretty hard. I upgraded my phone yesterday and Gemini wanted to take over my power button (no way). What's going to be easier than that?
Don't be silly. Just because the Crypto/Blockchain promises of grandeur turned out to be mostly nothing, and the "fuck regulation, we are all the <hotel, taxi driver, you name it>" "gig economy" companies are losing customers as they show their true colours, and the AI bubble starts to burst, that doesn't mean that over-hyped niche "technologies" can't rake in millions of some poor VC investors money.
It just requires lateral thought.
Pay the completely untrained gig-workers peanuts to review AI written code to create a universal blockchain "bank without borders". I mean what could possibly go wrong?
To push back at your obvious facetiousness, I do think that both cryptocurrencies and machine learning are very powerful and useful technologies. Underneath the scammers, grifters and investors that jump on the hype train for their get-rich-quick schemes, and the general public that falls for it and fuels the hype train, both technologies have solid reasons for existing, and can be generally very useful to humanity.
So I reject the notion of throwing the baby out with the bath water as much as the hype bubble around them.
What we do need, as with any novel technology, is oversight and regulation. Which is difficult this time around when the grifters are also the ones in power.
It's hard to see the positives considering current cryptocurrencies are 99% rug-n-pull ponzi schemes with the longevity of a mayfly, and the ones sticking around like bitcoin, eth, etc, are just a long-run-con with a value volatility rivaling only the volatility of the currently in-fashion javascript framework.
I mean, most modern financial instruments are fairly similar, albeit slightly more regulated, so what do I know. In a short span, we have witnessed speculative buying of GPUs, crypto mining (aka using shit ton of electricity and hardware to produce NOTHING of value), dropshipping, and my favorite: the tremendous value that NFTs and all other web3 trash brought to society, I can't help but wonder why people are tired of the crypto fads, especially since crypto delivered NOTHING of its promises:
- you can buy limited amount of stuff with it and you often need to convert it to "real" money
- its unstable and unregulated, so it's just a breeding ground for scammers and snake oil salesmen
- It fails hard on its privacy/anonymity promise, as it's LITERALLY the most traceable thing in the world, especially considering wallet scramblers are outlawed in many places
So much negativity for no reason, all web3 so far has been super successful! /s
> So I reject the notion of throwing the baby out with the bath water as much as the hype bubble around them.
I never mentioned throwing them out; I specifically mentioned that they are niche - they have useful applications in very specific domains.
That use isn't dependent on hype, because they don't need a bunch of investment dollars to somehow find a use-case and create artificial demand.
As an example, someone proposed a while ago that banks could use a blockchain to facilitate near instant foreign exchanges; for the sake of argument let's say that's a feasible thing for them to use it for, and is an improvement over their existing system for them.
The customer doesn't need to know and likely doesn't care that it uses a blockchain to facilitate the transfer. They care that the transfer was much quicker.
Eh, your entire comment was dismissive about the "technologies", and not unlike countless similar reactions about the topic. So any serious points you wanted to make were easy to miss within the sarcasm.
I do agree with your point that valid use cases don't need to rely on hype, but at the same time, the technology that powers it doesn't need to be invisible to users. Some amount of marketing around it shouldn't be an issue. The thing is that we've been flooded with it for the past decade+, and the critical thinking public has become desensitized to the bullshit. But this doesn't mean that underneath that there is zero legitimate value, as some people vocally claim.
I think a lot of startups are not really built with winning in mind but are more like a VC grift or even just a way for “serial entrepreneurs” to keep themselves busy and paid.
My genuine question--outside of programming-related use-cases (which are remarkable), what has come out of the generative AI "boom" that's a profitable product, or has a viable path to profitability?
What "business transformation" has happened in the private sector as a result of "agents" or whatever?
What companies look promising (don't say another VSC fork)?
None. No one is making money off of AI except for Nvidia.
Even if there are use cases, all of them are operating at extreme losses. As someone else said, maybe throw away video content? But I suspect that the providers are burning piles of cash to maintain users which is true for all AI driven products.
I mean, I'm a software developer and we have AI tools that we use, maybe not customer facing, but we have internal tools that provide lots of value.
Random example #1: we regularly scrape our competitors for their prices and offers, but it's insane to maintain all of that because our competitors update their pages/dom frequently so this doesn't scale over dozens of competitors and thousands of products. We replaced thousands of Playwright scraping code with few hundreds of lines of instructions for an LLM to find the information on the pages itself (it can figure out where/what is).
Random example #2: we sell some products that require lots of customer care and instructions as we're in the home maintenance business and sometimes there are questions about products and their installations that are extremely specific and we do have a chat and call center for our customers to assist them. What our customer care reps do is that they need to find and combine information often from multiple hundreds-page long PDFs. Thus we built an OCR+Rag pipeline to assist our customer care reps. This has provided tremendous value and cut our costs by a lot. It also has the potential to replace them completely and move them to other tasks, but it's gonna be a long time before we can really trust an LLM for that. The risks of giving incorrect or wrong information is too great right now. But internally customer care reps can double check the information as the LLM points out the original pdf sources (up to the specific line).
On top of that I'd say that there's also other tools that both make money and help us, such as AI in creative software like Adobe tools. Some of our graphic experts said that this speeds them up a lot, we need to produce or edit tons of images, illustrations, etc for our products.
And those are just few random examples of how AI definitely can speed up and improve margins of our company, while making cloud and saas vendors money too.
A lot more customer support seems to be handled by chat bots these days. For support that has migrated from humans to chatbots, I assume it's a poorer but cheaper implementation. For support that has migrated from older chatbots (that seemed to base their answers on regexes or some weird branching logic), maybe it's an improvement?
I'm not into this space, but I also assume that translation work is moving from a writing to an editing job, since an LLM can do that pretty well. I just had an LLM correcting my German mistakes for an email I had to send today.
I'm also not sure that profitability is relevant just yet, as inference costs keep going down. Programming-related use-cases do encompass a lot of why GenAI is useful, simply because they make anyone able to write their mothertongue a programmer. It's fine if LLM-based products bootstrap with high-margin industries like tech, and move into thinner margin ones as costs go down. Of course I'm also not saying the current valuations and hype are justified (I don't know).
I think veo and other generative video startups will find their place in advertisement space. I recently saw a pharma ad and its so convincing. Apparently it was generated with just $500 credit, and i know that this price will have to go up multi folds for it to be profitable but given that these ads cost 100s of thousands to make in 1 language, I dont think we have anything against making ads with AI if they save us so much money and can generate same ad in multiple languages.
When the dominoes start to fall, perhaps it’d be helpful to post a public list of existing / existed AI firms with brief descriptions, timespan of operation, capital / investments publicly known, and give a reference point for historical sake. The startup sector being quite diverse, one specifically for AI could be interesting…as in context for all the “problems” and “benefits” AI was going to solve but failed and burned money in the process.
I'm sure an LLM would be up to the task of shit talking as a service. All the big models are probably trained on all of n-gate already. With a bit of high quality prompt engineering as your moat, raising a few million shouldn't be too arduous.
> TikTok (business model: "Uber for Vine") is more popular than Facebook (business model: "Uber for Sino-Soviet Propaganda"), presumably because it bypasses the middleman and delivers the content straight from the source. Hackernews debates whether it's just a matter of time before it turns out to be evil, or whether a social-media application targeted at children and operated by a government full of genocidal monsters is and shall remain "fun." Other Hackernews point out that the app, which is operated by a company in which the murderous, barbaric Chinese government has an ownership stake, is mean to fat people.
> Github (business model: "Uber for README.MD") directs its employees to eat its own dog food. Because of Github's acquisition by Microsoft (business model: "Uber for customer abuse"), it turns out that what Github engineers are eating came out of the dog to begin with. Hackernews tries to figure out whether they, as customers of Microsoft's latest desperate attempt to get anyone to use Azure, have any control over their information, or whether they'd be better off remaining with their existing workstation-as-a-service provider, Apple (business model: "Uber for garden walls").
Depends! but Their selling the coming to investors on hopes of reinviting something that is already there. The data they're using isn't owned by them. All of these " unicorn " wanna be's are wasting investors money. This will be the norm for the upcoming years. Regulations are driving these AI companies to divert their efforts to something less substantial. First regulations has to be aligned with the goals of tech and see where this direction will head.
> A partner at accounting firm PKF Littlejohn signed off the UK accounts of the artificial intelligence start-up, despite having previously served as a director of another company also set up by Builder.ai’s founder, Sachin Dev Duggal, according to a review of hundreds of filings analysed by the Financial Times.
I wonder how many of these hype-chasing AI founders are going to take the path of self-enrichment while capitulating their startups when they get exhausted of searching for a moat.
I wonder how many of these hype-chasing AI founders are NOT going to take the path of self-enrichment while capitulating their startups when they get exhausted of pretending to build something.
I mean, if you qualify that question like that, then probably closer to 100%.
What would be more interesting to know, is how many AI founders starts out as "not hype-chasing", but end up self-enriching/capitulate their startups regardless, basically turning into it rather than starting out like that.
How do I get into this game? Take a bunch of VC money, pay myself a hefty salary, don't give a damn about my employees if the whole thing goes bust. Must be nice, not having principles.
I don’t think this is necessarily as sinister as you say - another way to right that paragraph is “successful accountant who has a history with AI companies does accounting”
Even a financially responsible (and I’m not suggesting Builder.ai is one of these) company in the AI space is going to be significantly more capital intensive than your typical SaaS startup, and I suspect are fundamentally more challenging to operate.
SaaS companies tended to need material engineering resource due to the software stacks and squad-style team structures in place -- also leaned heavily on costly metered infra
I'm not seeing anything like the same level of heads or stack complexity in this wave (Vercel, Firebase etc.), and the vendors involved get cheaper every day ... along with increasing ability to run models locally with no metered costs at all
If you're in the AI space you need roughly the same infrastructure as any other SaaS PLUS your LLM costs. Take a look at AWS Bedrock costs [1] and you'll soon realize your costs can escalate rapidly unlike traditional SaaS infra which is easier (er, less difficult) to predict costs.
The dirty secret of an awful lot of these LLM SAAS companies is that AWS are giving them tens of thousands of dollars to bootstrap, which they are paid back for with 8 figure investments from VCs. Anyone who is putting their own money on the line for anything other than the very first $100 or so for a PoC is being conned.
Now you need to deal with all the traditional infra, plus a bunch of specific infra dealing with LLM apps, even if you’re just a wrapper using vendor APIs.
How are things in any way simplified? I only see more layers of complexity.
> The company’s founder Sachin Dev Duggal stepped down as chief executive earlier this year but retained his board position and title of “chief wizard”.
If only there were some signal in the behaviour of a person who calls themselves “chief wizard” that might suggest they were prone to making poor quality business decisions.
For real: this is not a job title that would be adopted by a “serious person” - a real expert, with real insight, and a real plan to deliver. Why have investors given his company tens of millions of dollars?
I get that investors are looking for that 10x return and are ready for some failures along the way but that mindset seems to be used as cover for a lot of dumb money. Whereas the reality is that VCs and corporate backers would enjoy much better returns if they simply avoided the most obvious grifters.
People who can’t answer specific questions about delivery with concrete answers - Elizabeth Holmes, the WeWork clown, this guy, and on and on - should be avoided. And especially if they have dumb job titles.
Look at all the great unsustainable AI applications we're never going to be able to use.
I think the big and juicy AI applications are just so that GPUs can go brrrr[1]. Just gimmicks.
Real and useful applications will come from SLM that can be run on SoC like phones or Raspberry PIs and LLMs optimized to run on consumer grade hardware like the 3060s, not with those models that require multimillion dollar setups to be able to run.
Read about so many companies here in the UK that setup, claim huge success, max out loans and debts, then either fold/disappear or float on fraudulently inflated share prices, owner sells all their shares, then the company share price crashes. Happens all the time now, sadly, since the UK's welcome doors opened wide. This system runs deep here, laundering with barber shops, american candy stores, made up corporations, crypto fraud, carousel fraud, corporate fraud. It makes me sad, because I know I will never get a chance to build a business successfully and honestly here after all this damage is done.
Some people have so much money they don't mind investing 10-100m here and there in the hope of making a 10x return. Greed and hype explains a lot of the juicero type of investments.
It says a lot when public services are deteriorating pretty much everywhere while investors blow hundred millions on fruit pressing machines and LLM wrappers
> How are UK citizens voting for deteriorating services?
- Voting Tory, you get cutting of public health services (e.g NHS) and and Brexit.
- Voting Reform, you get the same plus a healthy dose of xenophobia and nationalism (it's thinly hidden-fascism, really).
- Voting Labour, you get the same cuts but with a nice label of "progress", so you can feel good about yourself. All the while flat prices are skyrocketing and your doctor's appointment might not ever happen, but there is always money for militarizing police and for sending abroad some bombs to kill Palestinians.
If people did want improved public services, they should have voted for somebodylike Jeremy Corbyn, who had the decency to distance himself from the absolute disgrace that Labour has become, or at least for the Greens/Socialists. But people did not, in fact, want improved public services, not really. They preferred to either vote for the xenophobe thugs of Reform, the xenophobe elitists Tories, or the pretend-liberal oligarch-loving Labour. You get what you vote for.
Could that be because 99% of mass medias who make or break politicians are owned by a small elite of hardcore capitalists who have their own interests in mind?
Democracy isn't just about showing up every few years and putting a name in a ballot, it's a framework that requires a whole bunch of other things. A lot of EU countries and the US are getting closer and closer to oligarchies
I agree I mean what about all the teachers and the long term impact they have on society? A “little hundred mil” could go a long way.
But, that aside, since I’m just getting into the Lean Startup:
In chapter 12—startups typically need Scarce but Secure Resources:
“too much budget is as harmful as too little—as countless dot-com failures can attest—…”
I suppose this falls under case-and-point. They had too much money and blurring the lines between real customers and early adopters. This whole thing could have probably been figured out for a couple mil I’d imagine (though I’m no expert).
Do you have a plausible path to 10x+ing tens of millions in capital?
Ultimately the business of VC means that you're dealing with people how have a high risk tolerance but need the potential high payout to balance their risk.
If you have a sustainable, profitable, but small business that needs capital to expand, but likely won't grow significantly, you're better off talking to a family office or individual investors. I'd avoid banks if you can help it.
If you actually do think you have a plausible VC investment then it's a game of networking. Go through every person you know and look for someone who knows someone who can give you an introduction. If all else fails there's cold outreach but those can be difficult. You might need to bring on a partner who can handle that side of things if it's critical to your business.
Have a look at lot of founders on linkedin. You'll notice a lot go to the same small set of universities, or worked for same companies. Then there's the odd exception. But they're the exception.
Its silly to think talent is actually that concentrated.
I think everybody knows why some people can get investment to literally throw down the drain on insane moon shots, while others struggle to even survive. I'm sure lots of people have moonshot ideas that might work. Only a very small in group get investment.
Same as it ever was. The rich and well-connected hoard resources among members of their clique. Then they have the nerve to strut around talking about what visionary geniuses they are to achieve this level of “success”.
If you're already profitable, these types of investors will not be interested. They are looking for companies they can take public at massively inflated valuations based on growth projections totally removed from economic reality.
If your networking skills and levels of resourcefulness are such that you're asking random people on HN how to talk to investors, it's very unlikely that any of these investors will invest in you. So the answer is to invest heavily in improving at those two areas.
If you look at some youtube videos of Sachin Duggal over the last year he is draped in lvmh labels, the finest tailoring, super expensive turkey teeth, and doing news interviews from expensive Dubai suites. My guess is he will make those things his mainstay from now on. I notice a common theme in dodgy ceo's; they all do the carrying-an-invisible-ball thing with their hands when they are presenting.
Perhaps they blew it all on "research" and GPU costs?
The current Gemini canvas implementation is pretty wild and can create you an app or website very very easily. Not as easy as ordering a pizza sure, but still even with just a few iterations you have something truly decent. Occasionally you luck out and the "one shot" is precisely what you want, but that typically requires an extensive prompt so you're beyond pizza range then.
Perhaps they were just too ahead of their time in that regard... But then if they'd waited then Google and OpenAi and Anthropic would have just eaten their lunch anyway (provided Claude was not too busy blackmailing you anyway!)
I mean it's kinda amazing, this was just in 2019 that this company was basically lying about being able to do this to get investment, yet now I can actually do it myself, right now, for free*. Incredible - where will we be in another 5 years?!!!
Until clawbacks as strict banishment enforcement from the ability to serve in corporate governance roles, it’s rather depressing to catch up after the fact and realize there’s nothing particularly stopping these bad actors individuals from profiting and potentially moving on to another shaky, at best, enterprise courting suckers…I mean, investors.
Maybe I'm just a bad dev but I'm baffled how they charge $46k for "29 features" and $56k for "43 features"... Straight up guestimations and magic numbers
but then again they also highlight how you don't have to know anything about tech to use them, so I'm sure setting "fixed pricing" for a fixed number of "features" is a great way to snake oil salesman potential customers
“Assembles your idea like a LEGO set” is pretty blatant trademark infringement too. Clearly it did not work as a LEGO set because those…actually work. Yet another example of startups getting funding whilst blatantly flouting IP ethics, color me not surprised at all.
I’m not sure what happened there but I’ve both experienced and seen so many startups where their initial leadership was great, then VC gets involved and completely destroys the long term trajectory of the company in exchange for short term growth.
I genuinely think twitter and LinkedIn has ruined the brains of founders who follow fads after losing the goals and visions they had when they first started.
There've always been companies that crash and burn chasing unrealistic dreams of future profits. I think what Twitter and LinkedIn have created is the false perception that these kinds of things are representative of the industry. Another recent unicorn startup in the UK is Tripledot Studios, which has much more revenue and has made bigger investment deals than Builder.ai at its peak. But they're in mobile gaming and not AI trendy wave of the future stuff, so you don't hear so much about them.
> contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on
Builder.ai was also a "success" until someone double checked their books and discovered they were inflating their revenue by about 300%. Much to consider.
https://archive.ph/T5ean
Following the public reporting timeline of builder.ai lays out a fascinating story akin to Theranos or Wework. I'm sure we'll get an exhaustive account of exactly what happen in due course, and there will likely be other such cases that come out of the most recent AI investing boom.
Aug 2019 - WSJ report that for builder.ai the "AI" means "Actually people in India"
https://www.wsj.com/articles/ai-startup-boom-raises-question...
FT pick up the trail over a year ago with a series of reports:
Mar 2024 - Men behind builder.ai named in criminal probe
https://www.ft.com/content/7ff3c5fc-e390-4ca8-9c7d-11fd56ab7...
Mar 2024 - The wild ride of a Microsoft-backed tech unicorn
This is a full detailed profile of the CEO and the company detailing their wild spending and fundraising details:
https://www.ft.com/content/11afc46c-b435-489d-a9f1-134ad0c00...
It all falls apart after that report:
May 2024 - CEO steps down
https://www.ft.com/content/f8882c90-ef69-4a62-aecf-9d3725aca...
May 2024 - builder.ai finds auditor had links to previous CEO:
https://www.ft.com/content/26c98590-e8f9-4cd9-83d6-db0d25ad2...
Apr 2025 - builder.ai restates revenues and hires outside auditors to investigate inflated sales
https://www.bloomberg.com/news/articles/2025-03-31/microsoft...
and this week they folded. The website was up 48 hours ago last I checked, but has now been taken down.
We will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.
I interviewed with them a fair while back and noped out as soon as they told me their ‘tech leads’ were typically assigned to handling 15 or 16 projects at a time for around £70-80k a year. Interviewed an ex senior engineer of theirs who was still junior/mid really.
By all accounts it looked like another web dev sweatshop and it just used AI as bait.
Decided to just step back from it all. Most AI startups are all talk and no action. Long hours and weekends with nothing to show for it.
Hopefully it's a sign of the bubble starting to pop. This is the same situation we had in the late 90s with the dot-com bubble. Many companies built on hype with lackluster products. So much so that it became a meme with zombo.com. We need an AI-bubble equivalent parody product.
Anything is possible at ZomboCom, You can do anything at ZomboCom.
Seems to be covered already!
Still up!
https://zombo.com/
Oh man, I forgot about ZomboCom
You're right. It would be a prime time to launch ZombAI
ZomboCom has outlived five or six bubbles by my count, and still as good as ever!
I feel like we’ve had two already with the Rabbit R1 and Humane AI Pin. So many company got funded with obscene amounts of money though, so I think we still have dozens more coming soon. Though I imagine a lot of them will be quieter failures having not even gotten to a product launch yet.
Those were special cases in that they were both AI startups and hardware startups, so double the doomed.
I don't think those are good examples, though. They were just ahead of their time, and poorly implemented. But an AI assistant that's accurate, immediately available, easier to use than a smartphone app, with better ergonomics, that integrates with other services ("agentic"), etc., is a billion-dollar idea. Someone will eventually crack this problem and produce a product that everyone will want. Just like Apple did with the iPhone, it will take a few years of lackluster products to get there. It's a matter of the tech getting good enough, affordable enough, and for someone to put the pieces together in the right package.
They were not ahead of their time, they were just hit by the limits of reality.
> accurate
Never gonna happen.
> easier to use than a smartphone app
Google is pushing their Gemini to Android phones pretty hard. I upgraded my phone yesterday and Gemini wanted to take over my power button (no way). What's going to be easier than that?
Don't be silly. Just because the Crypto/Blockchain promises of grandeur turned out to be mostly nothing, and the "fuck regulation, we are all the <hotel, taxi driver, you name it>" "gig economy" companies are losing customers as they show their true colours, and the AI bubble starts to burst, that doesn't mean that over-hyped niche "technologies" can't rake in millions of some poor VC investors money.
It just requires lateral thought.
Pay the completely untrained gig-workers peanuts to review AI written code to create a universal blockchain "bank without borders". I mean what could possibly go wrong?
To push back at your obvious facetiousness, I do think that both cryptocurrencies and machine learning are very powerful and useful technologies. Underneath the scammers, grifters and investors that jump on the hype train for their get-rich-quick schemes, and the general public that falls for it and fuels the hype train, both technologies have solid reasons for existing, and can be generally very useful to humanity.
So I reject the notion of throwing the baby out with the bath water as much as the hype bubble around them.
What we do need, as with any novel technology, is oversight and regulation. Which is difficult this time around when the grifters are also the ones in power.
ML I get, but what do you think the legitimate value of crypto is to humanity?
You seriously can't think of any legitimate value that an entirely digital currency can have?
Try asking an LLM. I'm not going to regurgitate what can be easily found elsewhere, or just deduced with a bit of thinking.
The constant groupthink negativity around this topic on HN is exhausting. It's just as bad as the hype.
"Try asking an automated hallucination system without the ability to reason why something is a good idea, I can't be bothered to make my own argument"
"I'm too lazy to think and do my own research, so I'll post a lazy dismissal that agrees with the hivemind."
It's hard to see the positives considering current cryptocurrencies are 99% rug-n-pull ponzi schemes with the longevity of a mayfly, and the ones sticking around like bitcoin, eth, etc, are just a long-run-con with a value volatility rivaling only the volatility of the currently in-fashion javascript framework.
I mean, most modern financial instruments are fairly similar, albeit slightly more regulated, so what do I know. In a short span, we have witnessed speculative buying of GPUs, crypto mining (aka using shit ton of electricity and hardware to produce NOTHING of value), dropshipping, and my favorite: the tremendous value that NFTs and all other web3 trash brought to society, I can't help but wonder why people are tired of the crypto fads, especially since crypto delivered NOTHING of its promises:
- you can buy limited amount of stuff with it and you often need to convert it to "real" money
- its unstable and unregulated, so it's just a breeding ground for scammers and snake oil salesmen
- It fails hard on its privacy/anonymity promise, as it's LITERALLY the most traceable thing in the world, especially considering wallet scramblers are outlawed in many places
So much negativity for no reason, all web3 so far has been super successful! /s
There isn’t any
I’m glad you implicitly agree that blockchains have failed to find any use case other than cryptocurrencies.
I don't, as that's a ridiculous thing to say.
Is it though?
Where are blockchains widely used nowadays, pray tell?
> So I reject the notion of throwing the baby out with the bath water as much as the hype bubble around them.
I never mentioned throwing them out; I specifically mentioned that they are niche - they have useful applications in very specific domains.
That use isn't dependent on hype, because they don't need a bunch of investment dollars to somehow find a use-case and create artificial demand.
As an example, someone proposed a while ago that banks could use a blockchain to facilitate near instant foreign exchanges; for the sake of argument let's say that's a feasible thing for them to use it for, and is an improvement over their existing system for them.
The customer doesn't need to know and likely doesn't care that it uses a blockchain to facilitate the transfer. They care that the transfer was much quicker.
> I never mentioned throwing them out
Eh, your entire comment was dismissive about the "technologies", and not unlike countless similar reactions about the topic. So any serious points you wanted to make were easy to miss within the sarcasm.
I do agree with your point that valid use cases don't need to rely on hype, but at the same time, the technology that powers it doesn't need to be invisible to users. Some amount of marketing around it shouldn't be an issue. The thing is that we've been flooded with it for the past decade+, and the critical thinking public has become desensitized to the bullshit. But this doesn't mean that underneath that there is zero legitimate value, as some people vocally claim.
I think a lot of startups are not really built with winning in mind but are more like a VC grift or even just a way for “serial entrepreneurs” to keep themselves busy and paid.
Problem with AI startup Ps is most have to lose. Open AI or cursor making a great product means this one becomes irrelevant.
This is my "hot take" as well.
My genuine question--outside of programming-related use-cases (which are remarkable), what has come out of the generative AI "boom" that's a profitable product, or has a viable path to profitability?
What "business transformation" has happened in the private sector as a result of "agents" or whatever? What companies look promising (don't say another VSC fork)?
None. No one is making money off of AI except for Nvidia.
Even if there are use cases, all of them are operating at extreme losses. As someone else said, maybe throw away video content? But I suspect that the providers are burning piles of cash to maintain users which is true for all AI driven products.
I don't know how much do I agree.
I mean, I'm a software developer and we have AI tools that we use, maybe not customer facing, but we have internal tools that provide lots of value.
Random example #1: we regularly scrape our competitors for their prices and offers, but it's insane to maintain all of that because our competitors update their pages/dom frequently so this doesn't scale over dozens of competitors and thousands of products. We replaced thousands of Playwright scraping code with few hundreds of lines of instructions for an LLM to find the information on the pages itself (it can figure out where/what is).
Random example #2: we sell some products that require lots of customer care and instructions as we're in the home maintenance business and sometimes there are questions about products and their installations that are extremely specific and we do have a chat and call center for our customers to assist them. What our customer care reps do is that they need to find and combine information often from multiple hundreds-page long PDFs. Thus we built an OCR+Rag pipeline to assist our customer care reps. This has provided tremendous value and cut our costs by a lot. It also has the potential to replace them completely and move them to other tasks, but it's gonna be a long time before we can really trust an LLM for that. The risks of giving incorrect or wrong information is too great right now. But internally customer care reps can double check the information as the LLM points out the original pdf sources (up to the specific line).
On top of that I'd say that there's also other tools that both make money and help us, such as AI in creative software like Adobe tools. Some of our graphic experts said that this speeds them up a lot, we need to produce or edit tons of images, illustrations, etc for our products.
And those are just few random examples of how AI definitely can speed up and improve margins of our company, while making cloud and saas vendors money too.
A lot more customer support seems to be handled by chat bots these days. For support that has migrated from humans to chatbots, I assume it's a poorer but cheaper implementation. For support that has migrated from older chatbots (that seemed to base their answers on regexes or some weird branching logic), maybe it's an improvement?
I'm not into this space, but I also assume that translation work is moving from a writing to an editing job, since an LLM can do that pretty well. I just had an LLM correcting my German mistakes for an email I had to send today.
I'm also not sure that profitability is relevant just yet, as inference costs keep going down. Programming-related use-cases do encompass a lot of why GenAI is useful, simply because they make anyone able to write their mothertongue a programmer. It's fine if LLM-based products bootstrap with high-margin industries like tech, and move into thinner margin ones as costs go down. Of course I'm also not saying the current valuations and hype are justified (I don't know).
I think veo and other generative video startups will find their place in advertisement space. I recently saw a pharma ad and its so convincing. Apparently it was generated with just $500 credit, and i know that this price will have to go up multi folds for it to be profitable but given that these ads cost 100s of thousands to make in 1 language, I dont think we have anything against making ads with AI if they save us so much money and can generate same ad in multiple languages.
so many AI chatbots could be easily replaced with links to navigable documentation
Or just a proper sitemap.
When the dominoes start to fall, perhaps it’d be helpful to post a public list of existing / existed AI firms with brief descriptions, timespan of operation, capital / investments publicly known, and give a reference point for historical sake. The startup sector being quite diverse, one specifically for AI could be interesting…as in context for all the “problems” and “benefits” AI was going to solve but failed and burned money in the process.
Somebody needs to bring back Fucked Company for AI companies.
Can we bring back Webshit Weekly while we're at it? RIP n-gate, you would have loved talking shit about AI companies.
I'm sure an LLM would be up to the task of shit talking as a service. All the big models are probably trained on all of n-gate already. With a bit of high quality prompt engineering as your moat, raising a few million shouldn't be too arduous.
That blog aged very well
> TikTok (business model: "Uber for Vine") is more popular than Facebook (business model: "Uber for Sino-Soviet Propaganda"), presumably because it bypasses the middleman and delivers the content straight from the source. Hackernews debates whether it's just a matter of time before it turns out to be evil, or whether a social-media application targeted at children and operated by a government full of genocidal monsters is and shall remain "fun." Other Hackernews point out that the app, which is operated by a company in which the murderous, barbaric Chinese government has an ownership stake, is mean to fat people.
> Github (business model: "Uber for README.MD") directs its employees to eat its own dog food. Because of Github's acquisition by Microsoft (business model: "Uber for customer abuse"), it turns out that what Github engineers are eating came out of the dog to begin with. Hackernews tries to figure out whether they, as customers of Microsoft's latest desperate attempt to get anyone to use Azure, have any control over their information, or whether they'd be better off remaining with their existing workstation-as-a-service provider, Apple (business model: "Uber for garden walls").
The prose makes my head hurt. Horribly written.
Might as well start building that list here
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isn't this normal for any new emerging market?
Depends! but Their selling the coming to investors on hopes of reinviting something that is already there. The data they're using isn't owned by them. All of these " unicorn " wanna be's are wasting investors money. This will be the norm for the upcoming years. Regulations are driving these AI companies to divert their efforts to something less substantial. First regulations has to be aligned with the goals of tech and see where this direction will head.
From earlier this year:
> A partner at accounting firm PKF Littlejohn signed off the UK accounts of the artificial intelligence start-up, despite having previously served as a director of another company also set up by Builder.ai’s founder, Sachin Dev Duggal, according to a review of hundreds of filings analysed by the Financial Times.
https://archive.ph/qdUFD
I wonder how many of these hype-chasing AI founders are going to take the path of self-enrichment while capitulating their startups when they get exhausted of searching for a moat.
I wonder how many of these hype-chasing AI founders are NOT going to take the path of self-enrichment while capitulating their startups when they get exhausted of pretending to build something.
Not sure why would the AI part make the difference with other founders.
All of them
That is indeed the song of venture capital.
And there are already so many companies with an existing moat that could go into this space with their existing user base.
> of these hype-chasing AI founders [...]
I mean, if you qualify that question like that, then probably closer to 100%.
What would be more interesting to know, is how many AI founders starts out as "not hype-chasing", but end up self-enriching/capitulate their startups regardless, basically turning into it rather than starting out like that.
How do I get into this game? Take a bunch of VC money, pay myself a hefty salary, don't give a damn about my employees if the whole thing goes bust. Must be nice, not having principles.
Start here: https://admission.stanford.edu/apply/
Why not YC?
https://www.ey.com/en_gl/weoy/class-of-2024/united-kingdom
I don’t think this is necessarily as sinister as you say - another way to right that paragraph is “successful accountant who has a history with AI companies does accounting”
Even a financially responsible (and I’m not suggesting Builder.ai is one of these) company in the AI space is going to be significantly more capital intensive than your typical SaaS startup, and I suspect are fundamentally more challenging to operate.
SaaS companies tended to need material engineering resource due to the software stacks and squad-style team structures in place -- also leaned heavily on costly metered infra
I'm not seeing anything like the same level of heads or stack complexity in this wave (Vercel, Firebase etc.), and the vendors involved get cheaper every day ... along with increasing ability to run models locally with no metered costs at all
If you're in the AI space you need roughly the same infrastructure as any other SaaS PLUS your LLM costs. Take a look at AWS Bedrock costs [1] and you'll soon realize your costs can escalate rapidly unlike traditional SaaS infra which is easier (er, less difficult) to predict costs.
[1] https://aws.amazon.com/bedrock/pricing/
The dirty secret of an awful lot of these LLM SAAS companies is that AWS are giving them tens of thousands of dollars to bootstrap, which they are paid back for with 8 figure investments from VCs. Anyone who is putting their own money on the line for anything other than the very first $100 or so for a PoC is being conned.
How?
Now you need to deal with all the traditional infra, plus a bunch of specific infra dealing with LLM apps, even if you’re just a wrapper using vendor APIs.
How are things in any way simplified? I only see more layers of complexity.
> The company’s founder Sachin Dev Duggal stepped down as chief executive earlier this year but retained his board position and title of “chief wizard”.
If only there were some signal in the behaviour of a person who calls themselves “chief wizard” that might suggest they were prone to making poor quality business decisions.
For real: this is not a job title that would be adopted by a “serious person” - a real expert, with real insight, and a real plan to deliver. Why have investors given his company tens of millions of dollars?
I get that investors are looking for that 10x return and are ready for some failures along the way but that mindset seems to be used as cover for a lot of dumb money. Whereas the reality is that VCs and corporate backers would enjoy much better returns if they simply avoided the most obvious grifters.
People who can’t answer specific questions about delivery with concrete answers - Elizabeth Holmes, the WeWork clown, this guy, and on and on - should be avoided. And especially if they have dumb job titles.
Look at all the great unsustainable AI applications we're never going to be able to use.
I think the big and juicy AI applications are just so that GPUs can go brrrr[1]. Just gimmicks.
Real and useful applications will come from SLM that can be run on SoC like phones or Raspberry PIs and LLMs optimized to run on consumer grade hardware like the 3060s, not with those models that require multimillion dollar setups to be able to run.
[1] https://news.ycombinator.com/item?id=40337936
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I, as a human, enjoyed the flavor of this phrase, and I applaud this stylistic choice.
You mean talk like an ai?
Read about so many companies here in the UK that setup, claim huge success, max out loans and debts, then either fold/disappear or float on fraudulently inflated share prices, owner sells all their shares, then the company share price crashes. Happens all the time now, sadly, since the UK's welcome doors opened wide. This system runs deep here, laundering with barber shops, american candy stores, made up corporations, crypto fraud, carousel fraud, corporate fraud. It makes me sad, because I know I will never get a chance to build a business successfully and honestly here after all this damage is done.
Do we need law to keep wages in escrow, including notice periods.
Well that investor list reads like a who’s who of dumb money…
Absolutely baffles me how you can blow $500m on a website builder without anyone noticing.
What the hell happened? Unless it was an actual defrauding of investors, but how were the investors so stupid?
Some people have so much money they don't mind investing 10-100m here and there in the hope of making a 10x return. Greed and hype explains a lot of the juicero type of investments.
It says a lot when public services are deteriorating pretty much everywhere while investors blow hundred millions on fruit pressing machines and LLM wrappers
The public services are deteriorating because that's what the people are voting for.
What do you mean by this? Do you mean in the UK, where this company was based.
How are UK citizens voting for deteriorating services?
> How are UK citizens voting for deteriorating services?
- Voting Tory, you get cutting of public health services (e.g NHS) and and Brexit.
- Voting Reform, you get the same plus a healthy dose of xenophobia and nationalism (it's thinly hidden-fascism, really).
- Voting Labour, you get the same cuts but with a nice label of "progress", so you can feel good about yourself. All the while flat prices are skyrocketing and your doctor's appointment might not ever happen, but there is always money for militarizing police and for sending abroad some bombs to kill Palestinians.
If people did want improved public services, they should have voted for somebodylike Jeremy Corbyn, who had the decency to distance himself from the absolute disgrace that Labour has become, or at least for the Greens/Socialists. But people did not, in fact, want improved public services, not really. They preferred to either vote for the xenophobe thugs of Reform, the xenophobe elitists Tories, or the pretend-liberal oligarch-loving Labour. You get what you vote for.
Did you miss the Brexit thing?
Could that be because 99% of mass medias who make or break politicians are owned by a small elite of hardcore capitalists who have their own interests in mind?
Democracy isn't just about showing up every few years and putting a name in a ballot, it's a framework that requires a whole bunch of other things. A lot of EU countries and the US are getting closer and closer to oligarchies
I agree I mean what about all the teachers and the long term impact they have on society? A “little hundred mil” could go a long way.
But, that aside, since I’m just getting into the Lean Startup:
In chapter 12—startups typically need Scarce but Secure Resources:
“too much budget is as harmful as too little—as countless dot-com failures can attest—…”
I suppose this falls under case-and-point. They had too much money and blurring the lines between real customers and early adopters. This whole thing could have probably been figured out for a couple mil I’d imagine (though I’m no expert).
How can I talk to those people? I have a business that is profitable, but small. And I find it difficult to talk to investors.
Do you have a plausible path to 10x+ing tens of millions in capital?
Ultimately the business of VC means that you're dealing with people how have a high risk tolerance but need the potential high payout to balance their risk.
If you have a sustainable, profitable, but small business that needs capital to expand, but likely won't grow significantly, you're better off talking to a family office or individual investors. I'd avoid banks if you can help it.
If you actually do think you have a plausible VC investment then it's a game of networking. Go through every person you know and look for someone who knows someone who can give you an introduction. If all else fails there's cold outreach but those can be difficult. You might need to bring on a partner who can handle that side of things if it's critical to your business.
Did you go to same university, the same clubs?
Have a look at lot of founders on linkedin. You'll notice a lot go to the same small set of universities, or worked for same companies. Then there's the odd exception. But they're the exception.
Its silly to think talent is actually that concentrated.
I think everybody knows why some people can get investment to literally throw down the drain on insane moon shots, while others struggle to even survive. I'm sure lots of people have moonshot ideas that might work. Only a very small in group get investment.
Same as it ever was. The rich and well-connected hoard resources among members of their clique. Then they have the nerve to strut around talking about what visionary geniuses they are to achieve this level of “success”.
If you're already profitable, these types of investors will not be interested. They are looking for companies they can take public at massively inflated valuations based on growth projections totally removed from economic reality.
The orgs investing millions usually aren’t looking to invest small or even profitable most the time.
If there’s a good growth story contact people who write smaller checks who would also be interested in using the product.
If your networking skills and levels of resourcefulness are such that you're asking random people on HN how to talk to investors, it's very unlikely that any of these investors will invest in you. So the answer is to invest heavily in improving at those two areas.
Also, some may hope to sell to a greater fool. Which works a lot of the time.
If you look at some youtube videos of Sachin Duggal over the last year he is draped in lvmh labels, the finest tailoring, super expensive turkey teeth, and doing news interviews from expensive Dubai suites. My guess is he will make those things his mainstay from now on. I notice a common theme in dodgy ceo's; they all do the carrying-an-invisible-ball thing with their hands when they are presenting.
Perhaps they blew it all on "research" and GPU costs?
The current Gemini canvas implementation is pretty wild and can create you an app or website very very easily. Not as easy as ordering a pizza sure, but still even with just a few iterations you have something truly decent. Occasionally you luck out and the "one shot" is precisely what you want, but that typically requires an extensive prompt so you're beyond pizza range then.
Perhaps they were just too ahead of their time in that regard... But then if they'd waited then Google and OpenAi and Anthropic would have just eaten their lunch anyway (provided Claude was not too busy blackmailing you anyway!)
nah
https://www.theverge.com/2019/8/14/20805676/engineer-ai-arti...
(same company, before rebranding to builder.ai)
I mean it's kinda amazing, this was just in 2019 that this company was basically lying about being able to do this to get investment, yet now I can actually do it myself, right now, for free*. Incredible - where will we be in another 5 years?!!!
* - with AIStudio at least...
I mean, have you not been paying attention to the current AI bubble? Hundreds of billions are being blown on all manner of implausible nonsense.
> The company’s founder Sachin Dev Duggal (...) retained his board position and title of “chief wizard”.
Flash of the Silicon Valley show.
The UK has cemented its place in tech as the land without Sarbanes-Oxley.
It's true.
Until clawbacks as strict banishment enforcement from the ability to serve in corporate governance roles, it’s rather depressing to catch up after the fact and realize there’s nothing particularly stopping these bad actors individuals from profiting and potentially moving on to another shaky, at best, enterprise courting suckers…I mean, investors.
Hmmm...criminal CEO plus no product that people need. Who would have guessed this outcome?
The entire company and its $500M has been "deleted" [0] over fraud and cooking their books.
A great candidate for the Theranos of AI, even with Microsoft involved as an investor.
We'll see a new wave of fraud(stars) being exposed out of this AI hype.
[0] https://builder.ai
here's the website from the waybackmachine: https://web.archive.org/web/20250328114320/https://www.build...
look at all the awards and brands!
Maybe I'm just a bad dev but I'm baffled how they charge $46k for "29 features" and $56k for "43 features"... Straight up guestimations and magic numbers
but then again they also highlight how you don't have to know anything about tech to use them, so I'm sure setting "fixed pricing" for a fixed number of "features" is a great way to snake oil salesman potential customers
“Assembles your idea like a LEGO set” is pretty blatant trademark infringement too. Clearly it did not work as a LEGO set because those…actually work. Yet another example of startups getting funding whilst blatantly flouting IP ethics, color me not surprised at all.
Not really a trademark infringement.
I’m not sure what happened there but I’ve both experienced and seen so many startups where their initial leadership was great, then VC gets involved and completely destroys the long term trajectory of the company in exchange for short term growth.
I genuinely think twitter and LinkedIn has ruined the brains of founders who follow fads after losing the goals and visions they had when they first started.
There've always been companies that crash and burn chasing unrealistic dreams of future profits. I think what Twitter and LinkedIn have created is the false perception that these kinds of things are representative of the industry. Another recent unicorn startup in the UK is Tripledot Studios, which has much more revenue and has made bigger investment deals than Builder.ai at its peak. But they're in mobile gaming and not AI trendy wave of the future stuff, so you don't hear so much about them.
Why is this a big news, didn't we already learn that most startups/companies fail and investors are just betting to find their next unicorn?
contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on
> contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on
Builder.ai was also a "success" until someone double checked their books and discovered they were inflating their revenue by about 300%. Much to consider.
It's maybe a bit of a Theranos situation. Not your normal sincere effort that fails.
Are any of those companies profitable?
the first domino has fallen, the rest of the industry to follow?
Big tech then swoops in and buys up any _worthwhile_ startup for cheap and consolidation of power continues for tech.
That TLD is no guarantee for success.