#FactCheck- AI-Generated Video Falsely Claims Free Mobile Phones for Ration Card Holders

Artificial intelligence is growing at a rapid pace, with startups promising breakthroughs in industries and attracting billions in investment. Among these was Builder.ai, a London-based company founded in 2016 by an Indian entrepreneur. Once valued at over $1.5 billion, it was known for its game-changing platform that could let anyone build custom apps quickly and affordably with the help of AI.

Yet in 2025, Builder.ai collapsed dramatically, filing for bankruptcy across multiple countries and laying off nearly 80% of its workforce. What was once a celebrated unicorn has become a cautionary tale, exposing not only the risks of hype-driven growth in AI but also inflicting reputational damage on Indian founders in the global startup ecosystem.

The Rise: Big Promises, Big Investors

Builder.ai branded itself as a no-code/low-code app development platform, where its AI assistant “Natasha” would guide customers in creating apps without technical expertise. The pitch was simple and attractive: app development was made “as easy as ordering pizza.” The story resonated with major investors. Backed by SoftBank, Microsoft, and Qatar’s sovereign wealth fund, Builder.ai raised more than $450 million. It scaled rapidly, positioning itself as one of Europe’s most promising AI startups.

The Cracks Appear

Behind the glamour, the first cracks appeared as early as 2019, when The Wall Street Journal reported that Builder.ai’s platform depended far more on human engineers than on the AI automation it advertised. In reality, the much-hyped AI assistant “Natasha” was often just “a guy instead”, i.e., skilled developers in India manually writing code behind the scenes on whose backs the company expanded aggressively. 

The real blow came from Builder.ai’s finances. The company was accused of inflating revenue figures by 300%, with alleged use of round-tripping tactics involving fake invoices that inflated financials.  While it publicly projected revenues of $220 million in 2024, its actual figure was closer to $55 million. When this reality surfaced, investor confidence was lost quickly, and the company’s liabilities ballooned to nearly $100 million, with less than $ 10 million in assets remaining. 

Collapse and Legal Scrutiny

By 2025, the company’s foundations had crumbled. The founder stepped down as CEO but retained the unusual title of “Chief Wizard.” Massive debts to AWS, Microsoft, and other partners mounted into the hundreds of millions. Assets were seized, and the company filed for bankruptcy in the U.S., UK, India, and the UAE.

For clients, the collapse meant abandoned projects. For employees, around 1,000 of them, it meant sudden unemployment. And for investors, it was a devastating loss. The Securities and Exchange Commission and U.S. Attorney’s Office in New York have since launched investigations into potential fraud and investor misrepresentation.

Reputational Damage: Impact on Indian Founders

Perhaps the most enduring consequence of Builder.ai’s downfall is the hit to the credibility of Indian founders on the global stage.

For years, Indian entrepreneurs have earned trust in global tech circles, with leaders heading companies from Google to Microsoft. Indian-led startups abroad were viewed as reliable, innovative, and growth-driven. Builder.ai’s collapse disrupts this narrative.

The allegations of inflated revenue, AI exaggeration, and questionable governance risk reinforcing skepticism among global investors regarding Indian organisational ethics. For other Indian founders seeking international capital, the road has now become tougher: stricter due diligence, harsher scrutiny of claims, and slower trust-building.

This reputational damage arrives at a critical time when India is positioning itself as a global hub for AI and leads the world in AI skill penetration. Rather than highlighting the strength of India’s entrepreneurial and talent ecosystem, the fall of Builder.ai has drawn attention to the risks of overpromising and underdelivering.

Conclusion

The fall of Builder.ai is more than the bankruptcy of one AI unicorn. It is a warning to companies against chasing hyper growth fueled by the riding of the AI wave. While the company’s downfall exposed flaws in governance and accountability, its deeper impact lies in how it dented trust. To drive AI and technology innovation, startups must move beyond flashy valuations and commit to authentic innovation, transparency, and financial integrity.

References

• https://www.moodys.com/web/en/us/insights/lending/moodys-early-warning-in-action-builder-ai.html#:~:text=Despite%20marketing%20itself%20as%20an,fake%20invoices%20that%20inflated%20financials. 
• https://today-innovation.webflow.io/unveiling-the-power-of-natasha-an-ai-assistant-of-builder-ai-to-revolutionize-app-generation 
• https://finance.yahoo.com/news/builder-ais-shocking-450m-fall-170009323.html
• https://www.pib.gov.in/PressReleasePage.aspx?PRID=2108810 
• https://www.cnbctv18.com/technology/how-a-london-based-startups-artificial-ai-gambit-backfired-ws-l-19613692.htm# 

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Introduction

Global cybersecurity spending is expected to breach USD 210 billion in 2025, a ~10% increase from 2024 (Gartner). This is a result of an evolving and increasingly critical threat landscape enabled by factors such as the proliferation of IoT devices, the adoption of cloud networks, and the increasing size of the internet itself.  Yet, breaches, misuse, and resistance persist. In 2025, global attack pressure rose ~21% Y-o-Y ( Q2 averages) (CheckPoint) and confirmed breaches climbed ~15%( Verizon DBIR). This means that rising investment in cybersecurity may not be yielding proportionate reductions in risk. But while mechanisms to strengthen technical defences and regulatory frameworks are constantly evolving, the social element of trust and how to embed it into cybersecurity systems remain largely overlooked.   

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Human Error and Digital Trust  (Individual Trust) 

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Human error is consistently recognised as the weakest link in cybersecurity. While campaigns focusing on phishing prevention, urging password updates and using two-factor authentication (2FA) exist, relying solely on awareness measures to address human error in cyberspace is like putting a Band-Aid on a bullet wound. Rather, it needs to be examined through the lens of digital trust. As Chui (2022) notes, digital trust rests on security,  dependability, integrity, and authenticity. These factors determine whether users comply with cybersecurity protocols. When people view rules as opaque, inconvenient, or imposed without accountability, they are more likely to cut corners, which creates vulnerabilities. Therefore, building digital trust means shifting from blaming people to design: embedding transparency, usability, and shared responsibility towards a culture of cybersecurity so that users are incentivised to make secure choices. 

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Organisational Trust and Insider Threats (Institutional Trust)

At the organisational level, compliance with cybersecurity protocols is significantly tied to whether employees trust employers/platforms to safeguard their data and treat them with integrity. Insider threats, stemming from both malicious and non-malicious actors, account for nearly 60% of all corporate breaches (Verizon DBIR 2024). A lack of trust in leadership may cause employees to feel disengaged or even act maliciously.  Further, a 2022 study by Harvard Business Review finds that adhering to cybersecurity protocols adds to employee workload. When they are perceived as hindering productivity, employees are more likely to intentionally violate these protocols.  The stress of working under surveillance systems that feel cumbersome or unreasonable, especially when working remotely, also reduces employee trust and, hence, compliance.  

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Trust, Inequality, and Vulnerability (Structural Trust)

Cyberspace encompasses a social system of its own since it involves patterned interactions and relationships between human beings. It also reproduces the social structures and resultant vulnerabilities of the physical world. As a result,  different sections of society place varying levels of trust in digital systems.  Women, rural, and marginalised groups often distrust existing digital security provisions more, and with reason. They are targeted disproportionately by cyber attackers, and yet are underprotected by systems, since these are designed prioritising urban/ male/ elite users.  This leads to citizens adopting workarounds like password sharing for “safety” and disengaging from cyber safety discourse, as they find existing systems inaccessible or irrelevant to their realities. Cybersecurity governance that ignores these divides deepens exclusion and mistrust.

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Laws and Compliances (Regulatory Trust)

Cybersecurity governance is operationalised in the form of laws, rules, and guidelines. However, these may often backfire due to inadequate design, reducing overall trust in governance mechanisms. For example, CERT-In’s mandate to report breaches within six hours of “noticing” it has been criticised as the steep timeframe being insufficient to generate an effective breach analysis report. Further, the multiplicity of regulatory frameworks in cross-border interactions can be costly and lead to compliance fatigue for organisations. Such factors can undermine organisational and user trust in the regulation’s ability to protect them from cyber attacks, fuelling a check-box-ticking culture for cybersecurity.  

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Conclusion 

Cybersecurity is addressed primarily through code, firewall, and compliance today. But evidence suggests that technological and regulatory fixes, while essential, are insufficient to guarantee secure behaviour and resilient systems. Without trust in institutions, technologies, laws or each other, cybersecurity governance will remain a cat-and-mouse game.  Building a trust-based architecture requires mechanisms to improve accountability, reliability, and transparency.  It requires participatory designs of security systems and the recognition of unequal vulnerabilities. Thus, unless cybersecurity governance acknowledges that cyberspace is deeply social,  investment may not be able to prevent the harms it seeks to curb. 

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References 

• https://www.gartner.com/en/newsroom/press-releases/2025-07-29
• https://blog.checkpoint.com/research/global-cyber-attacks-surge-21-in-q2-2025
• https://www.verizon.com/business/resources/reports/2024-dbir-executive-summary.pdf 
• https://www.verizon.com/business/resources/reports/2025-dbir-executive-summary.pdf 
• https://insights2techinfo.com/wp-content/uploads/2023/08/Building-Digital-Trust-Challenges-and-Strategies-in-Cybersecurity.pdf 
• https://www.coe.int/en/web/cyberviolence/cyberviolence-against-women 
• https://www.upguard.com/blog/indias-6-hour-data-breach-reporting-rule 

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Executive Summary

Claims are circulating that Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in a major attack allegedly carried out by Israel and the United States. Amid these claims, a video is being widely shared on social media in which Khamenei can be heard saying, “Beware of fake news, I am alive.” Research conducted by CyberPeace has found the viral claim to be false. Our research revealed that the video being shared is old and that Khamenei’s voice has been altered using artificial intelligence to support a misleading narrative.

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Claim

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On March 1, 2026, an Instagram user shared the viral video in which Ayatollah Ali Khamenei is heard saying, “Beware of fake news, I am alive.” The link to the post and its archived version are provided above along with a screenshot.

• https://www.instagram.com/reel/DVWWA9vkU-6/ 
• https://archive.ph/g30Ce 

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Fact Check:

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To verify the authenticity of the claim, we extracted key frames from the viral video and conducted a reverse image search using Google Lens. During the research, we found the same video on the YouTube channel of Sky News Australia, published on June 19, 2025. In the approximately 43-minute-long video, the portion used in the viral clip appears around the 10-minute mark.

• https://www.youtube.com/watch?v=9mmZblh3blo 

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According to Sky News Australia’s report, Iran’s Supreme Leader Ayatollah Ali Khamenei had rejected US President Donald Trump’s demand for unconditional surrender. The Ayatollah regime also warned that any American military intervention would be accompanied by “irreparable damage.” Upon closely listening to the viral clip, we noticed that Khamenei’s voice sounded robotic, raising suspicion that it may have been AI-generated. We then analyzed the video using the AI detection tool AURGIN AI. The results indicated that the viral clip had been generated using artificial intelligence.

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Conclusion

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Our research establishes that the viral video is old and has been digitally manipulated. Ayatollah Ali Khamenei’s voice has been altered using artificial intelligence and the clip is being shared with a misleading claim.

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