The limits of artificial intelligence have been starkly highlighted in a distressing real-world scenario involving an Indian-origin founder. While AI can automate and analyse, it cannot shield companies from criminal acts like blackmail and extortion, which remain firmly within the domain of law enforcement. This reality has hit home for Varun Vummadi, the co-founder and CEO of the San Francisco-based AI startup Giga, who is currently battling an alleged extortion scheme targeting his company.
The Extortion Demand and Public Revelation
Varun Vummadi took to social media platform X to share alarming details about the situation. He explained that a small group had illegally obtained confidential company information and was using it to demand a ransom of $3 million in cryptocurrency. To substantiate his claims, Vummadi shared a screenshot of a threatening email. The message warned that unless the payment was made, the perpetrators would release manipulated data snippets and make false, defamatory allegations against the company publicly.
"They have already posted information on Twitter that is false and defamatory, and now they are threatening to take snippets of this data, manipulate it out of context, and release it to the public with wildly false and defamatory allegations unless we wire $3M to an anonymous crypto account," Vummadi wrote in his post.
Netizen Scrutiny and Past Allegations
The public revelation sparked immediate questions from online users. Many questioned the very existence of data that could be used for extortion. "Why would there be data that you guys could be extorted by?" asked one user. Others advised caution, with one commenter noting, "Why would you draw more undue attention to yourself bro, scrutiny has not served yall well."
This scrutiny is not entirely new for Giga. The company has faced public accusations from former employees in the past. Notably, Jared Steele, a former staffer hired to lead demand generation, publicly criticised the startup's work culture. He labelled it the "most toxic" he had experienced, citing a lack of work-life balance, mandatory 12-hour shifts, and unfulfilled compensation promises, which led him to quit within a single day. Steele and others had accused Giga of unethical practices, including falsifying revenue numbers and bribing Fortune 500 companies.
Vummadi has consistently denied all previous allegations, calling them "wildly false and defamatory." He connects the current extortion attempt to the company's recent success, suggesting the data is being weaponised following Giga's successful $61 million Series A funding round in November 2025.
The Founders and Giga's Journey
Giga was founded in 2023 by two IIT Kharagpur alumni, Varun Vummadi and Esha Manideep. The company specialises in developing voice-based AI agents for business clients. Both founders made significant personal sacrifices to launch their venture. Esha Manideep turned down a job offer worth $150,000, while Varun Vummadi chose the startup over pursuing a PhD at Stanford and a lucrative quant trader role valued at $525,000.
The current crisis underscores a harsh truth for the tech ecosystem: rapid growth and substantial funding can make startups targets. While AI technology advances, human-led crimes like extortion present challenges that no algorithm can currently solve, placing the onus on legal frameworks and investigative authorities to intervene.
