For decades, the IT services industry has relied on a simple, lucrative math: more code requires more people. Firms like Infosys and TCS built global empires by scaling headcount to meet the endless demand for software maintenance and integration. Vishal Sikka, the former CEO of Infosys, thinks that model is about to break.

His new startup, Hang Ten Systems, emerged from stealth this week with $32 million in seed funding. The goal is not to manage a massive workforce, but to replace the traditional "body shop" approach with agentic AI. It is a direct challenge to the very industry Sikka once led.

The End of Linear Scaling

The fundamental tension in IT services is headcount. Traditional firms grow their revenue by adding more engineers. If a project doubles in complexity, the billable hours double, too. Mayfield, the lead investor in Hang Ten’s seed round, is betting that Sikka can decouple that growth.

"Traditional services scale linearly with headcount," Mayfield managing partner Navin Chaddha said. "Hang Ten is built so its leverage grows with every project."

By utilizing agentic code generation and reusable AI skills, the startup aims to automate the heavy lifting of enterprise software delivery. It is an ambitious pivot. Sikka, who spent 12 years at SAP and served on Oracle’s board, is betting that enterprises are ready to trade human-heavy teams for AI-native project delivery. The early results suggest some are. The startup is already working with clients like Siemens Gamesa Renewable Energy and Fresenius.

A Market in Flux

Hang Ten enters a market that is currently in the middle of an existential debate. Analysts at Jefferies have warned that IT services firms are uniquely vulnerable to AI disruption. If software can write itself, the value of manual coding drops.

Yet, the industry incumbents are not standing still. Infosys and its peers are racing to integrate tools from OpenAI and Anthropic into their own workflows. They argue that AI will expand the market, not destroy it. Infosys chairman Nandan Nilekani recently suggested that "AI-first services" could become a $300 billion to $400 billion opportunity by 2030.

It is a clash of philosophies. One side sees AI as a tool to make existing firms more efficient. Sikka sees it as a way to render the old model obsolete.

The Team Behind the Wave

Sikka is not building this alone. The startup is packed with veterans from his previous ventures, including his former enterprise AI company, VianAI. The leadership team includes CTO Navin Budhiraja and Chief Design Officer Sanjay Rajagopalan. Even Yahoo co-founder Jerry Yang has joined the board.

This is a high-stakes gamble. Sikka’s previous venture, VianAI, focused on decision-making tools, while Hang Ten is strictly focused on the mechanics of building and operating software. It is a more direct assault on the core business of the global IT services sector.

Key Takeaways

  • Hang Ten Systems has raised $32 million to replace human-heavy IT services with AI-driven automation.
  • The startup aims to break the "linear scaling" model where revenue growth is tied directly to hiring more engineers.
  • The venture faces a crowded market where traditional giants like Infosys are also aggressively pivoting to AI-first service models.

What happens next depends on the software. If Hang Ten can prove that its AI agents can handle complex enterprise projects more reliably than a team of developers, the pressure on traditional firms will intensify. The industry is watching. The race is on.