Hang Ten Systems, a Palo Alto startup founded by former Infosys CEO Vishal Sikka, closed a $32 million seed round on Tuesday. The money goes toward hiring and expanding the startup’s work with large corporate clients.Sikka bets against traditional IT servicesMayfield led the round, with Aramco Ventures putting in a strategic investment and a group of angels also participating, according to the company’s press release. Sikka spent 12 years at SAP overseeing products and technology before running Infosys as CEO until 2017. His new company targets the same enterprises that have long relied on IT services firms to customize and maintain software, but argues that generative AI has broken the economics of that model.AI-driven code generation has cut the cost and time required to build custom enterprise capabilities, the company said. Hang Ten’s pitch is built on continuously building, modifying, and operating software for clients using agentic code generation, a reusable skills library, and domain expertise in finance, HR, and product development.“Every single enterprise will be transformed by AI,” Sikka said in the company’s announcement. “A few are already reaping massive benefits, building in days what used to take years. But most are stuck at the starting line, or worse, and the gap is widening every day.”The founding team draws heavily from Sikka’s previous ventures. Co-founders include CTO Navin Budhiraja, chief design officer Sanjay Rajagopalan, and senior vice president of Forward Deployed Engineering Tao Liu, all of whom worked alongside Sikka at SAP, Infosys, or his prior startup VianAI. Yahoo co-founder Jerry Yang sits on the board.Hang Ten already has paying clientsThe startup has paying clients despite going live about a month ago, according to Mayfield managing partner Navin Chaddha. Siemens Gamesa Renewable Energy and healthcare company Fresenius are among the first customers on what Hang Ten calls AI-native project delivery. Vinod Philip, CEO of Siemens Gamesa, said his company is working with Hang Ten “on several strategic initiatives,” calling the startup a source of “sound trusted guidance on AI.”Sikka’s previous company, VianAI, came out of stealth in 2019 with $50 million in seed funding and later pulled in $140 million in a 2021 round that SoftBank Vision Fund 2 led. Chaddha told TechCrunch that the two companies serve different markets. VianAI built enterprise AI applications and analytics tools for decision making, while Hang Ten is a services company focused on replacing traditional software customization and maintenance with AI-created code. “Traditional services scale linearly with headcount,” Mayfield said. “Hang Ten is built so its leverage grows with every project.”The launch drops as the IT services industry works out what AI means for its business. Jefferies analysts have argued that IT services could face early and meaningful AI disruption.Infosys chairman Nandan Nilekani offered a more optimistic read this week, saying AI could expand the industry’s addressable market. The company told investors this month that “AI-first services” could hit a $300 billion to $400 billion market by 2030.Infosys shares have fallen more than 35% this year, according to a LiveMint report. The company partnered with Anthropic in February 2026 to pull Claude models into its Topaz platform for agentic AI solutions in telecommunications and financial services.If you're reading this, you’re already ahead. Stay there with our newsletter.