British AI start-up embroiled in sex assault claims after going bust
The acrimonious collapse of one of Britain's most feted AI start-ups came after it faced allegations that a senior executive sexually assaulted a former member of staff, The Telegraph can reveal.
The alleged assault took place at a hotel in India in 2022 and was reported to the police at the time. A board member alerted management to the claims, which were also the subject of a public petition to remove the executive.
The Telegraph is aware of the identities of the alleged perpetrator and victim but cannot name them for legal reasons.
The alleged assault was said to have taken place when the executive was on holiday and not on company business. The individual has since left the company.
However, The Telegraph understands the incident remains the subject of ongoing legal proceedings in India against the police for alleged failure to investigate the complaint properly.
A police filing reported in Indian media at the time, which did not name Builder AI, alleged the victim was forced to take a pill at 3am after meeting the executive in a hotel bar, and was later seriously assaulted in a hotel room.
The alleged victim told her sister and friends, who urged her to take the incident to the police.
It is understood the executive denied any wrongdoing.
Builder AI commissioned an internal investigation into the matter, led by the company's general counsel.
Sachin Dev Duggal, Builder AI's ousted chief and founder, is said to have recused himself from the investigation and received the final report. There is no suggestion of wrongdoing by Mr Duggal.
Despite the investigation, Manpreet Ratia, Builder AI's new chief executive, this weekend insisted the full board and wider executive team at Builder AI had not been informed of the matter.
Builder AI said: 'The matter was first raised with the company by an individual board member, acting in their personal capacity.
'Based on internal emails reviewed to date, it appears that Sachin Duggal recused himself from involvement in the matter.
'The company has been informed that a report was submitted by the general counsel to Sachin Duggal and the individual board member, concluding that no further action was warranted. This report was not shared with the broader board or the executive leadership.
'For avoidance of doubt, the full board of directors and the executive team were not made aware of this matter at the time it arose.'
The statement added the wider board was first made aware of the claims after being contacted by The Telegraph, and that the investigation had not been overseen or directed by the board.
The sexual assault claims at Builder AI, which have not previously been reported, come days after the business filed for bankruptcy in the US amid reports that inflated sales precipitated its dramatic collapse.
Builder AI's lenders pulled support from the business earlier in May after forecast sales failed to materialise and came in far below expectations. Predicted sales of $220m (£163m) came in at closer to $50m.
The company has been served with subpoenas by US prosecutors in New York, who have asked for information on its financial reporting and accounting, The Telegraph understands.
Mr Duggal, Builder AI's founder and 'chief wizard', launched the business in 2016 with the aim of making building an app as 'easy as ordering a pizza'.
The company offered what it called 'human-assisted AI', using a chatbot called Natasha and human contractors to quickly and cheaply build apps.
The company raised $250m from investors, including Microsoft and venture capital investors Jungle Ventures and Insight Partners, who bought into Mr Duggal's vision.
However, Mr Duggal was ousted in February after the board found that the company's revenues for 2024 were far lower than had been forecast.
The events ultimately led lenders to pull $40m from the company's accounts in May, according to a letter to investors, forcing the UK-headquartered start-up to file for bankruptcy in the US.
Last week, the Financial Times reported Builder AI was suspected by former employees to have engaged in multiple methods to boost revenues, including alleged circular transactions and deals with resellers that took years to pay up.
A source familiar with the company's finances, however, denied this, and insisted its revenues were always reported properly, transparent and said that business with partners was legitimate.
Builder AI collapsed with liabilities of up to $100m, bankruptcy filings show. According to the note to investors, the company owed more than $88m to cloud providers, such as Amazon.
The start-up had been widely hailed as UK AI champion. Mr Duggal was named an EY World Entrepreneur of the Year in 2024. Its failure, and the sexual assault allegations, threaten to cast a shadow over Britain's AI ambitions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
an hour ago
- Telegraph
Eight dead after hot-air balloon bursts into flames
At least eight people have died after a hot-air balloon caught fire and plunged to the ground in Brazil. Of the 21 people on board, 13 survived and have been rushed to the hospital in the city of Praia Grande. Footage shared by the local news outlet G1 appeared to show the hot-air balloon catching fire and plummeting towards the ground, letting out billows of smoke. In a video on X, Jorginho Mello, governor of Brazil's southern state of Santa Catarina, said: 'We are in mourning. A tragedy has happened. We will see how it unfolds, what happened, why it happened. But the important thing now is for the state structure to do what it can.' The governor added that he has asked authorities to head to the municipality 'to do as much as possible to rescue, to help, to take to hospital, to comfort the families'. Praia Grande, which is known as the 'capital of the canyons', is a common destination for hot-air ballooning and attracts scores of tourists. Local sources say an investigation has been launched to discover the cause of the incident. The accident comes after a woman died in a hot-air balloon ride in Brazil's southeastern state of Sao Paulo on June 15.
Daily Mail
an hour ago
- Daily Mail
EXCLUSIVE Female tycoon is private jet-crazed power lesbian who mocked male employee for being old, say ex-colleagues
A Lamborghini-racing, private jet-loving executive has been accused of plundering her company's coffers in a trio of explosive lawsuits from former associates. Jessica Mah, founder of venture capital firm Mahway Management, stole millions from the company to fund a lavish lifestyle including gifts for her co-founder, Andrea Barrica, with whom she is accused of having a lesbian affair, legal filings claim. She also stands accused of lobbing ageist insults to a subordinate, according to one of the lawsuits. Mah denies all the claims against her, with her representatives telling Daily Mail the attempted legal takedown is retaliation for a sexual assault lawsuit she filed against one of the plaintiffs, her investor Justin Caldbeck. Caldbeck, who is the CEO of D Global Ventures, previously admitted sexual misconduct towards six women in his professional orbit after being exposed in the early stages of the #MeToo movement. Tensions flared between him and Mah over the size of his return on his investment, which he believed was less than he had been promised. Mah began the legal frenzy by suing Caldbeck on May 14, accusing him of threatening to 'destroy' and 'bankrupt' her if she did not pay him the profits he believes he was rightly owed. Caldbeck denies the allegations and countersued hours later, claiming Mah 'seduced investors with misleading and often contradictory representations in quarterly investor reports'. Luxe-loving tycoon Mah was also accused in a separate lawsuit of lavishing gifts and perks on her alleged lover Barrica at the company's expense. Both women have denied any romance. 'Mah is a charlatan living on investors' funds intended for Mahway's portfolio of start-up companies, the majority of which are only "unicorns" in the sense that they are also imaginary,' Caldbeck claims in his lawsuit. In business, a 'unicorn' is a private start-up valued at $1 billion. Mah has bragged about being a 'unicorn breeder.' Caldbeck claims in his suit that Mah, an alum of the Forbes 30 under 30 club, 'misappropriated' money from investors to pay for private chefs, a $1 million private jet, her $16,500-a-month home, luxury cars and vacations to destinations such as Park City, Utah, and Burning Man. 'As of February 2025, Mah had taken millions in fees, even though Mahway's portfolio company investments were underperforming. Those fees were millions of dollars more than Mah was entitled to under the relevant agreements,' Caldbeck's suit states. Mah's Instagram page is chocked full of images of her exotic escapes, ritzy dinners and sports car-racing endeavors. Caldbeck's claims were echoed in suits brought by two of Mah's former employees — ex-President Walter Delph and former chief financial officer William Mulholland — who sued the young executive for alleged wrongful termination and whistleblower retaliation. Delph claims in his filing that Mah showered her alleged lover Barrica with benefits and gifts offered to no one else at the company, including paying 'hundreds of thousands of dollars on Barrica's personal vacations'. Mah, 'would rub Barrica's upper inner thighs' during company meetings, according to the filing, which also accused Mah of sexual harassment. Delph claimed in his filings that she forced him and other staffers to work from her West Hollywood home where they allegedly saw Mah's sexual partners 'in various stages of undress'. The suit claims Mah bragged about her sexual encounters with other employees, who allegedly had to 'witness their sexual conduct and activities'. He additionally accused Mah of age discrimination, claiming she'd frequently call him an 'old man' and ridicule his opinions in front of other employees. Delph and Mulholland claim in their complaints that they were wrongly fired after raising concerns Mah was misleading investors. Mah denied the allegations and hit back in a suit against Delph on May 15, accusing him of conspiring with Caldbeck and Mulholland to defame her. 'As alleged in the complaints, Mulholland and Delph joined Mr. Caldbeck's attempted 'shake down' in the hopes of making a quick buck themselves. Their claims have no basis in reality,' Mah's lawyers told Daily Mail. All three men are represented by Caldbeck's longtime lawyer, Ivo Labar. They all claim their suits were filed independently from one another. However it is not the first time such allegations have been leveled at Mah. She and her business partner on a previous venture were accused of misappropriating $1.9 million for personal expenses, in 2021 lawsuit filed by one of their business partners. Mah's lawyer confirmed to Daily Mail that the lawsuit was settled out of court in 2023 for an undisclosed amount and that she did not pay 'a penny' towards it. Mah insists that all the claims against her are defamatory and that she is the victim of sexual assault and a smear campaign. She claims she has honored the terms she and Caldbeck mutually agreed on for his investment into Mah's venture, an LLC called Mahway Inception One. 'He knew the risks. He knew that it would take many years before the investment could return a profit,' Mah's complaint read. 'But in fall demanded that Ms. Mah restructure the pay him massive returns that the investment had not yet generated.' Emails from July 2022 between Caldbeck and Mah shown in her lawsuit appear to demonstrate that Caldbeck was at least aware of the investment structure. 'Justin Caldbeck's allegations against Jessica Mah are objectively false. Caldbeck claims he was misled into investing in Inception One,' Mah's lawyers said in a statement. 'But the documents he signed state the exact profit allocation he now says he didn't know about. When Ms. Mah pointed that out, he refused to accept responsibility and filed a sham lawsuit,' the statement continued. Mah's lawsuit claims Caldbeck extorted her by threatening to broadcast her alleged fraud to her investors, the media and even the Securities and Exchange Commission (SEC). Her lawsuit also pointed to Caldbeck's sordid past with sexual misconduct. Six women accused him of unwanted advances in 2017, The Information first reported. At the time, Caldbeck admitted to the allegations and resigned from his post at Binary Capital, an early-stage venture capital firm he co-founded. Mah said Caldbeck repeatedly made 'unwelcome' advances toward her, one of which allegedly occurred during a business meeting at West Hollywood's Pendry hotel in June 2022. In her lawsuit, she alleged Caldbeck 'touched the upper-most part of [her] thigh and put his hand next to her genitalia' after consuming several drinks. Barrica, the woman accused of having an affair with Mah, filed her own lawsuit on May 20. Like Mah, she accused Caldbeck of sexual harassment and extortion. She described an alleged incident where she claims he repeatedly tried to get on top of her and kiss her in an Uber while they were in Paris. Caldbeck denies this ever happened. According to Barrica's lawsuit, Caldbeck tried to, 'leverage his repulsive behavior by threatening to spread objectively false allegations' that she was in a relationship with Mah. Representatives for Mah and Barrica said the two are best friends and have never been romantically or sexually involved. The representatives added that both women were in committed relationships at the time these allegations were made. According both women's lawsuits, they tried to keep a professional relationship with Caldbeck until they had a falling out over his claims of their financial malfeasance. Caldbeck allegedly told her at one point: 'Even if Jess said that I raped her, I wouldn't care. My investors wouldn't care either,' his lawsuit states. Caldbeck's spokesperson, Sallie Hofmeister, dismissed Mah's claims as, 'nothing more than a calculated effort ... to distract from credible accusations that they have misused millions of dollars of investor funds'. 'Nearly a year ago, she explicitly threatened to weaponize past allegations against Mr. Caldbeck if he pursued legal claims related to fraud and embezzlement against her,' Hofmeister told Daily Mail.
BreakingNews.ie
an hour ago
- BreakingNews.ie
Mike Lynch's superyacht fully raised above water for first time since it sank
Tech tycoon Mike Lynch's superyacht has been fully raised above water for the first time since it sank off the coast of Sicily. Seven people died when the Bayesian sank off the Italian island on August 19, including billionaire Mr Lynch, 59, and his daughter Hannah, 18. Advertisement The 56-metre (184ft) yacht was seen being held above the water by one of Europe's most powerful sea cranes near the fishing town of Porticello on Saturday afternoon. The yacht's propeller, rudder and keel all appeared to be intact. It was then lowered again slightly and salvage crews say that on Sunday it will be moved to Termini Imerese – where Italian prosecutors investigating the sinking are based. On Saturday morning, workers could be seen on the vessel, which is covered in mud and algae, while the canopy and guard rails are mangled. Advertisement The full word 'Bayesian' could be seen on the stern of the yacht and a ladder which Italian coastguard officials say was originally on the ship to allow passengers to disembark was seen cracked and pointed upwards on the starboard side. Also visible on the top deck was the stump of the mast. Salvage workers say there were 18,000 litres of fuel on board. Investigators in the UK and Italy say raising the vessel is crucial to fully understanding what happened. Advertisement Balloon-like kit will be used to lift the Bayesian's mast, a project insider said. The yacht's 72-metre (236ft) mast was cut off on Tuesday using a remote-controlled tool and rested on the seabed. Mike Lynch's superyacht the Bayesian is lifted to the surface near the fishing town of Porticello, Sicily. Photo: Peter Byrne/PA. He told PA: 'Lifting bags will be used on the mast, but this will not start until Tuesday or Wednesday. 'In the interim, the salvors on-site not accompanying Bayesian to port will be conducting a full sweep of the seabed site for any potential debris.' Advertisement Meanwhile, Michele Maltese, of the Italian coastguard, told reporters that thermal cameras were used to check for any potential fuel leaks. A local law investigator was also at the scene, he said. Marcus Cave of British firm TMC Marine, which is overseeing the salvage efforts, said: 'This was a complex and precise lifting operation to recover Bayesian, and followed a step-by-step programme of salvage work. 'The salvage team has progressed in a systematic way that prioritised the safety of all working on site and minimised any potential impact on the environment. Advertisement 'This care for personnel and for the environment will continue as Bayesian is transported into port tomorrow.' The vessel was originally expected to be raised last month, but salvage efforts were delayed after a diver died during underwater work on May 9, prompting greater use of remote-controlled equipment. Water is pumped off Mike Lynch's superyacht the Bayesian as it is lifted to the surface near Porticello, Sicily. Photo: Peter Byrne/PA. About 70 specialist personnel had been mobilised to Porticello from across Europe to work on the recovery operation, which began last month. Inquest proceedings in the UK are looking at the deaths of Mr Lynch and his daughter, as well as Morgan Stanley International bank chairman Jonathan Bloomer, 70, and his wife, Judy Bloomer, 71, who were all British nationals. Marine Accident Investigation Branch investigators said in an interim report that the Bayesian was knocked over by 'extreme wind'. The yacht had a vulnerability to winds, but the owner and crew would not have known, the report said. US lawyer Chris Morvillo and his wife Neda Morvillo, and Canadian-Antiguan national Recaldo Thomas, who was working as a chef on the vessel, also died in the sinking. Fifteen people, including Mr Lynch's wife, Angela Bacares, were rescued. World Report into sinking of Mike Lynch's superyacht Bay... Read More Mr Lynch and his daughter were said to have lived in the vicinity of London and the Bloomers lived in Sevenoaks in Kent. The tycoon founded software giant Autonomy in 1996 and was cleared in June last year of carrying out a massive fraud over the sale of the firm to Hewlett-Packard (HP) in 2011. The boat trip was a celebration of his acquittal in the case in the US.
