Builder.ai, the no-code and AI-assisted app-development startup legally identified in company materials as Engineer.ai Corporation, announced on May 20, 2025 that it was entering insolvency proceedings in the United Kingdom and would appoint an administrator. “Bankruptcy” is understandable shorthand, particularly for U.S. readers, but the available reporting does not establish that Builder.ai filed for U.S. Chapter 11.
The company had received Microsoft investment and announced a strategic collaboration with Microsoft in 2023. Builder.ai said its collapse followed “historic challenges and past decisions” that strained its finances. Contemporaneous reporting attributed a roughly $37 million creditor seizure and approximately $5 million in remaining restricted funds to reporting from Yahoo Finance. Those figures are not presented here as independently verified court findings.
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Which company filed for bankruptcy?
The startup was Builder.ai, a company that marketed software for building applications with no-code tools, automation, reusable software components and human engineering support. Its proposition was aimed at people and organizations that wanted to create applications without maintaining a traditional software-development team.
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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →That description matters. Builder.ai was not simply an autonomous AI model that generated finished applications without people. Its offering combined technology with services and engineering work. The practical question for customers was therefore not only how capable its AI was, but also whether the company could reliably deliver, host, maintain and support the applications it sold.
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Builder.ai was legally associated with Engineer.ai Corporation, the name cited in the company statement reproduced in contemporaneous coverage. Computerworld’s report identifies Builder.ai as the company referred to in the bankruptcy headlines.
What happened on May 20, 2025?
Builder.ai announced that it was entering insolvency proceedings in the UK and would appoint an administrator. The company said it intended to support employees, customers and partners while exploring options for parts of the business.
An administrator generally takes control of the relevant business or assets, assesses the company’s position and considers possible outcomes. Depending on the circumstances, those outcomes can include a sale, restructuring, continued trading for a period or liquidation. The available material confirms the insolvency announcement, but it does not by itself establish the final disposition of Builder.ai, its assets, customer contracts or creditor claims.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsWhy “bankruptcy” is technically imprecise
Insolvency is a broad term describing a company’s inability to pay debts or a financial condition addressed through formal legal procedures. In the UK, administration is one possible insolvency process.
Chapter 11 bankruptcy, by contrast, is a specific reorganization procedure under U.S. law. The available reporting does not show that Builder.ai filed a U.S. Chapter 11 case. For that reason, the most precise description is that Builder.ai entered UK insolvency proceedings and planned to appoint an administrator.
The distinction is more than legal vocabulary. The identity of the administrator, the jurisdiction, the applicable insolvency rules and the formal claims process determine what employees, customers, lenders and other creditors can do next.
What was Microsoft’s relationship with Builder.ai?
Microsoft was an investor and strategic technology partner, not necessarily Builder.ai’s owner, operator or guarantor.
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In May 2023, Microsoft announced an equity investment and a strategic collaboration with Builder.ai. The collaboration was intended to connect Builder.ai’s app-building platform with Microsoft’s cloud and AI ecosystem, including Azure OpenAI Service, Azure Cognitive Services and Microsoft Cloud. The companies described the arrangement as a way to help users build AI-powered applications without requiring extensive technical expertise.
Microsoft’s backing did not mean that Microsoft guaranteed Builder.ai’s debts or would rescue the business if it became insolvent. A strategic investment can provide capital, distribution, technology access or commercial credibility, but it does not make the investor responsible for all of a portfolio company’s liabilities.
This is an important distinction for investors and customers. “Microsoft-backed” describes a relationship with Microsoft; it does not mean that Builder.ai was a Microsoft subsidiary or that its contracts were Microsoft contracts.
How much money had Builder.ai raised?
Builder.ai had raised more than $450 million, according to contemporaneous reporting. Some secondary reports use different totals, so a more precise figure should not be treated as settled without company records, audited accounts, administrator reports or court documents.
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Reporting cited by Computerworld said creditor Viola Credit had seized approximately $37 million, leaving Builder.ai with roughly $5 million in restricted funds. Those amounts should be understood as reported figures, not as independently verified findings established by the insolvency process.
Other dramatic claims circulated after the collapse, including alleged debt levels, daily cash burn, revenue inflation, valuation figures and claims about how much work was performed by humans rather than AI. The available evidence does not establish those claims as facts. They should not be used to conclude that Builder.ai defrauded investors, misrepresented its technology or owed a particular amount to named companies unless supported by primary legal or financial records.
What caused the collapse?
Builder.ai itself attributed the failure to “historic challenges and past decisions” that placed significant strain on its finances. That is the company’s stated explanation, but it is not a detailed forensic account of the business.
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Contemporaneous reporting described a severe liquidity crisis, including the reported creditor seizure and large-scale layoffs. Most employees were reportedly laid off, while the company said it intended to support employees, customers and partners.
The available material does not independently establish a single cause such as fraudulent reporting, ineffective AI, excessive spending or a particular level of debt. A startup can fail even when its underlying technology has customers and respected strategic investors. It may face high engineering costs, hosting bills, support obligations, customer-acquisition expenses, integration work and capital requirements before reaching sustainable profitability.
What does the insolvency mean for Builder.ai customers?
Customers with unfinished or live projects may face uncertainty over support, hosting, source code, data access, warranties, refunds and future maintenance. The exact outcome depends on the customer contract, where the application and data are hosted, what assets the administrator controls and whether a buyer acquires any part of the business.
It would be incorrect to say that every customer lost an application or data. The available evidence does not establish that. It is equally unsafe to assume that every customer will automatically receive source code, a refund or continued support.
Customer checklist
- Export what you can. Download project files, data, documentation, designs, workflow definitions, credentials and configuration records while access remains available.
- Preserve evidence. Keep contracts, statements of work, invoices, payment records, support tickets, change requests and delivery correspondence.
- Check ownership rights. Review whether your contract gives you rights to source code, intellectual property, designs, data, prompts, integrations and unfinished work.
- Identify the hosting arrangements. Determine whether your data is held by Builder.ai, a third-party cloud provider or another subcontractor, and whether you have a direct account or export route.
- Contact the administrator. Ask about continued access, unfinished work, refunds, data retrieval, contract status and the process for submitting a creditor claim.
- Rotate secrets. Change passwords and rotate API keys, database credentials, webhook secrets and other credentials that may have been exposed or controlled through the platform.
- Review privacy obligations. If the application handled personal or regulated data, assess retention, security, access and deletion responsibilities with appropriate legal advice.
- Verify payment instructions. Do not pay new invoices until you confirm that the recipient is authorized to collect them during the insolvency process.
This is general information rather than legal advice. Customers with material claims or sensitive data should obtain advice in the relevant jurisdiction.
What is confirmed, and what remains uncertain?
| Issue | What the available evidence supports |
|---|---|
| Company | Builder.ai, legally associated with Engineer.ai Corporation. |
| Announcement | Builder.ai announced UK insolvency proceedings on May 20, 2025. |
| Administration | The company said it would appoint an administrator. |
| Microsoft | Microsoft invested in Builder.ai and announced a strategic collaboration in May 2023. |
| Funding | More than $450 million had reportedly been raised, although exact totals vary. |
| Creditor seizure | Approximately $37 million was reportedly seized by Viola Credit, according to reporting cited by Computerworld. |
| Employees | Most employees were reportedly laid off. |
| Final outcome | The available material does not establish whether the business was ultimately sold, restructured, liquidated or otherwise resolved. |
What Builder.ai’s failure says about AI and no-code startups
The lesson is not that Microsoft-backed companies cannot fail, or that the entire no-code and AI-app market is failing. The narrower lesson is that an attractive AI narrative and strategic backing do not remove ordinary software-business risks.
- Automation does not eliminate costs. Hosting, security, integrations, engineering review, customer support and account management still require money and people.
- AI branding is not a substitute for delivery evidence. Buyers should understand which tasks are automated, which require human services and how that division affects price and capacity.
- Portability is a financial-control issue. If a vendor disappears, the ability to export data, workflows and source code can determine whether a business can recover quickly or must rebuild from scratch.
- Investment is not continuity insurance. A recognizable investor can improve credibility, but it does not guarantee the platform, support team or customer contracts will survive.
- Unit economics matter. A no-code vendor may have substantial costs for every customer, user, workflow, AI request or hosted application. Low entry prices do not necessarily imply predictable production costs.
How to choose a replacement for Builder.ai
There is no universal replacement. The right choice depends on whether the project is an internal tool, a customer-facing SaaS product, a portal, a mobile application or an enterprise workflow.
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Microsoft Power Apps
Microsoft Power Apps is the most natural fit for organizations already using Microsoft 365, Teams, Azure, Dataverse or Power Platform. It offers Microsoft ecosystem integration, connectors, governance and enterprise controls.
Microsoft lists a free Developer Plan for building and testing and lists Power Apps Premium at $20 per user per month, paid yearly, at the time of the supplied pricing review. A high-volume option and Copilot Studio pricing are also listed, but licensing can be complex. Power Apps is generally a poor fit for an independent builder seeking a simple public consumer application with minimal platform overhead.
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Bubble is aimed at founders and teams building customer-facing web applications, SaaS products and increasingly mobile applications. Its strengths include visual workflows, APIs, web deployment and broad application-building capabilities.
Bubble lists a free plan, with Starter at $59 per month billed annually, Growth at $209 and Team at $549 at the time of the supplied pricing review. Bubble uses workload-based pricing, so buyers should model usage rather than assuming a fixed subscription will determine total cost. It is also a poor fit for organizations that require complete infrastructure portability.
Glide
Glide is well suited to internal tools, dashboards and lightweight database-driven business apps. It emphasizes quick setup and an approachable interface.
Glide’s pricing page lists Free, Solo at $25 per month and Team at $125 per month, with Enterprise pricing customized. Buyers should check limits for credits, projects, databases, users and backups. Glide may not suit highly customized software or teams that require broad infrastructure control and traditional source-code ownership.
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Retool
Retool focuses on internal enterprise tools, administrative panels, database interfaces and operational applications. It offers integrations, permissions, workflows and self-hosting options at higher tiers.
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At the time of the supplied pricing review, Retool listed Team pricing at $10 per builder per month plus $5 per internal user, and Business pricing at $50 per builder plus $15 per internal user. Its builder-versus-user model can work well for operational teams, but it is usually not the best fit for a consumer-facing SaaS product.
Softr
Softr positions itself as an AI and no-code builder for portals, intranets, dashboards, CRM-style tools and business software built around structured data. Its pricing page advertises free building, but the accessible material did not provide a complete verified list of current plan prices.
Softr can be a practical option for business portals and data-driven applications, but buyers needing custom architecture, low-level code access or a fixed price without contacting the vendor should assess its limitations carefully.
A continuity checklist for any no-code vendor
Before moving a critical business process to a no-code or AI platform, ask:
- Can we export structured data, files, workflows and source code?
- Who owns the code, designs, prompts, data and unfinished work?
- Can the application be self-hosted or migrated to another provider?
- Where are backups stored, and can the customer retrieve them independently?
- What happens to customer data if the vendor stops trading?
- Are fees based on users, builders, apps, AI credits, automation runs, workload or database capacity?
- Can usage-based charges rise sharply with traffic or automation volume?
- Are SSO, role-based permissions, audit logs, retention controls and environment separation available?
- Does the platform support the required web, mobile, internal or public deployment model?
- What contractual remedies exist if the vendor fails to provide support or access?
Do not treat any replacement as immune to vendor failure. The practical response to Builder.ai’s collapse is to reduce lock-in, maintain independent backups and make exit rights part of the buying decision.
Bottom line
Builder.ai entered UK insolvency proceedings on May 20, 2025 after raising more than $450 million and receiving investment and strategic support from Microsoft. The company’s announcement and the reported financial figures show a serious collapse, but the available evidence does not establish that Microsoft owned Builder.ai, guaranteed its debts, or that the company filed for U.S. Chapter 11.
For customers, the immediate priorities are preserving data and credentials, reviewing ownership and refund rights, and contacting the administrator. For future software buyers, the clearest lesson is financial as well as technical: portability, transparent pricing, independent backups and vendor-continuity protections are essential parts of the cost of using an AI or no-code platform.
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Status note: The supplied evidence confirms the May 2025 insolvency announcement but does not verify the final outcome of the proceedings as of August 16, 2026.
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