SoftBank-backed Engineer.ai clarifies on WSJ allegations of making fake AI promises

Anything or everything new to the human race is attractive whether it is new clothes, towns, movies, gadgets, jobs or technology.

Moreover, sometimes as with everything new, it can be deceptive or sold to you by someone looking to cash in on hype around it. Artificial Intelligence (AI) is one such new thing, which startups are increasingly abusing to get funding and new users.

Tech startup Engineer.ai, which claims to have built an artificial intelligence-assisted app development platform, is one such platform that has been alleged to exaggerate its AI capabilities.

According to the Wall Street Journal report, the company does not use AI to assemble code for apps as it claims. The firm relying mostly on human engineers, while using the hype around AI to attract customers, it added.

Last year in October, Los Angeles-based Engineer.ai raised $29.5 million from investors including Softbank-owned Deepcore.

The report also claimed to have talked to the company's former employees, who also said that the company is hyping its AI capabilities.

According to Robert Holdheim, former CBO of Engineer.ai, the company is exaggerating its AI abilities to get the funding. Sachin Dev Duggal (Engineer.ai CEO) was telling investors that Engineer.ai was 80% done with developing a product that, in truth, he had barely even begun to develop, as per Holdeim, who also sued the company this year.

However, Engineer.ai founder Duggal, in a response to Entrackr, denied the allegations made by the WSJ report.

"We never said we use AI to assemble code. We said we use a Human-Assisted AI to run the end to end process. There are parts of this that are just non-ai based automation, some parts that are AI and some parts that are Human," said Duggal, who started the company with building cloud operation in 2016 as Builder.

The report is based on old employee account, who was not aware of what we had in tech stack, he added. On allegations by his former CBO, Duggal sharing platform approach slide presented to investors said we never said we have done 80% in terms of building our platform.

The company also said that it has around 78 engineers currently working with Computer Science background, out of which 7% are working with its Intelligent Systems.

Of late, the startups' ecosystem has witnessed a phenomenal rise of AI-based startups. In reality, 7-8 out of 10 such startups companies are just using AI in their pitch to escalate chances of getting funded.

Largely, because AI is also a bit complex and defined loosely, which makes it difficult for nonexperts to discern. As per a London venture capital firm, MMC survey, almost 40% of 2830 AI startups in Europe do not use AI.

Despite this, funding is flowing in the sector.