U.S tech giant Microsoft (MSFT) was weaker today as U.K. tech group Builder.ai crumbled into insolvency.
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AI Software Development
The MSFT-backed British firm, according to a report in the Financial Times, informed its employees today that it was in financial difficulties. It said that its main unit called Engineer.ai Corporation would be entering into insolvency proceedings and will be appointing an administrator.
The company, which uses AI to help businesses and entrepreneurs create their own software, websites and apps, had hoped that it would make tech development as “easy as ordering pizza,” but those hopes have now, it seems, failed to deliver.
Microsoft first invested back in 2023 in what the Builder.ai website described as a strategic collaboration and equity investment deal.
Chief Wizard Loses His Spark
According to the FT, Microsoft, Qatar’s sovereign wealth fund and other investors had poured a combined $450 million into the London-based company launched in 2019.
Builder.ai has been plagued by controversy, most of it around its former chief executive or “chief wizard,” as he liked to be known, Sachin Dev Duggal. He left the company earlier this year.
He has been at the center of claims, reported by the FT, that he has been named in high-profile criminal probes in India as well as linked to questionable accounting practices.
Builder.ai said today that the company had been unable to “recover from historical challenges and past decisions that had placed significant strain on its financial position.”
It will be a blow to Microsoft but unlikely to steer it too far from its AI path. It owns a 49% stake in OpenAi and is aiming to strengthen its position in the growing market.
Is MSFT a Good Stock to Buy Now?
On TipRanks, MSFT has a Strong Buy consensus based on 30 Buy and 5 Hold ratings. Its highest price target is $600. MSFT stock’s consensus price target is $509.41 implying an 11.67% upside.
