Ex-IT Giants Ditch Corporate Safety for AI Startups—What They Discovered Will Shock You!

As the world of technology evolves at breakneck speed, a noticeable trend is emerging among senior Indian IT executives: many are leaving their comfortable positions at established firms to launch their own artificial intelligence (AI) startups. Since mid-2025, at least 12 executives from major US-based IT companies have made this leap, signaling a seismic shift in the industry landscape.

On Friday, Coforge announced the resignation of its executive vice president Anup Kumar, who cited an intention to pursue an “entrepreneurial route.” This trend is being driven by the increasing capabilities of AI, which have created a prime opportunity for seasoned professionals to start anew.

Industry experts indicate that these founders are strategically leveraging their extensive networks and knowledge acquired over years in large enterprises to offer cost-efficient, AI-driven services. As Gaurav Parab, principal industry analyst for IT services at consultancy firm NelsonHall, noted, “Senior leaders are leaving big IT firms because, for the first time, a small AI-native team can win the kind of work that once required an army of engineers.”

Without the constraints of legacy structures, these entrepreneurs can innovate quickly, addressing niche opportunities often overlooked by larger firms. For instance, an entire team from the healthcare division of business process outsourcing company FirstSource left in February to establish Simplify Alpha. This team included notable figures such as Venkatgiri Vandali, former president of healthcare and life sciences, and Deepan Vashi, executive vice president and global head of solutions.

Vandali emphasized the changing dynamics of the industry, stating, “AI has neutralized the advantage of scale. Operating in silos — whether by capability, geography, or deal size — is a liability now, not a strength.” He identified that the real, unmet demand lies in smaller, complex problems that larger companies often ignore. “We built Simplify Alpha to fill that exact gap. And the client's appetite there is insatiable,” he said.

Already, Simplify Alpha has partnered with a healthcare software provider and acquired an implementation team with 400 engineers. This agility in addressing smaller but pressing business needs highlights the potential for innovation in a rapidly changing digital landscape.

Another example is Jayaprakash Bandu, who recently departed from a senior leadership role at Mphasis to cofound an AI startup currently in stealth mode. Bandu's motivation stemmed from witnessing the transformative power of agentic AI, which enables small teams to accomplish in weeks what previously required hundreds of engineers and years of development. “That is what made me step out and start building,” Bandu remarked.

The implications of this talent exodus are profound for traditional IT services firms. As executives depart to form nimble startups, these established companies not only face the loss of experienced leaders but also contend with emerging competitors who possess intimate knowledge of their operations.

In the case of FirstSource, the healthcare sector contributes over 30% to its overall revenue, making the departure of key executives particularly impactful. Parab from NelsonHall predicts that this trend of senior executives turning into founders will continue to gain momentum. Venture capitalists are keen to invest in these new ventures, recognizing the value of founders with established client connections in the booming AI services sector.

A report from Bessemer Venture Partners underscores this emerging trend, noting that the ideal founding team for an AI-enabled services startup should possess “deep domain expertise of selling, building, and delivering software in the target domain.” The rapid ability of these executives to attract clients is crucial to the investment appeal of their startups.

As these shifts unfold, the landscape of IT services is poised for significant transformation. The new wave of AI startups led by seasoned professionals promises to address specific needs in ways that traditional firms may struggle to keep pace with, reshaping the future of the industry.