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Investing.com -- The artificial intelligence startup, Builder.ai, which recently revealed bankruptcy plans, reportedly fabricated business transactions with Indian social media startup, VerSe Innovation, to falsely enhance its sales. This information was obtained from documents assessed by Bloomberg and individuals who have direct knowledge of the operation.
From 2021 to 2024, both companies consistently invoiced each other for approximately equal amounts, as evidenced by the documents reviewed by Bloomberg. This was allegedly part of a scheme known as "round-tripping," utilized by Builder.ai to exaggerate the revenue figures it presented to investors. The sources, who wished to remain anonymous due to the sensitive nature of the information, stated that in numerous instances, neither company provided the products or services corresponding to these payments.
VerSe co-founder, Umang Bedi, refuted the allegations in an interview, stating that the claims that his company would have documented expenses or charged for services that it did not receive or provide are “absolutely baseless and false.” He further clarified, “We’re not the kind of company that is in the business of inflating revenues.”
Builder.ai, which had once been valued at approximately $1.5 billion, is the most high-profile AI startup to falter since the launch of ChatGPT sparked a worldwide investment rush.
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