Former Infosys chief launches new startup to challenge IT services with AI

Vishal Sikka, the former CEO of Infosys, one of India's largest IT services firms, is betting that artificial intelligence can replace much of the work traditionally done by outsourcing. His new startup, Hang Ten Systems, announced on Wednesday that it has raised a $32 million seed round led by Mayfield, with strategic investment from Aramco Ventures and participation from angel investors. The company's board includes Yahoo co-founder Jerry Yang.

Hang Ten Systems helps enterprises continuously build, modify, and operate software using AI-driven development and automation. The startup enters a market where IT services companies like Infosys are racing to adapt to AI through partnerships with firms such as Anthropic and OpenAI. The launch comes amid a debate over whether AI will expand the industry's market or fundamentally change how enterprise software is built.

Sikka, 59, spent 12 years building enterprise software at SAP and later served on Oracle's board. Mayfield Managing Partner Navin Chaddha told TechCrunch that the company started just a month ago and already has customers, including Siemens Gamesa Renewable Energy and Fresenius.

Headquartered in the Bay Area, Hang Ten plans to expand globally. The founding team includes executives who worked with Sikka at SAP, Infosys, and his previous AI startup VianAI. Mayfield noted that traditional services scale linearly with headcount, but Hang Ten is built so its leverage grows with every project.

Investors are debating AI's impact on IT services. Jefferies analysts argue that IT services may be among the first sectors to face AI disruption, while Infosys chairman Nandan Nilekani believes AI could expand the addressable market. Infosys shares have fallen over 35% this year.