Since mid-2025, at least 12 US-based senior executives have exited large IT companies to start new ventures as the rise of artificial intelligence has created a sweet spot for them to turn into startup founders.
On Friday, Coforge said its executive vice president Anup Kumar resigned to pursue an “entrepreneurial route.”
These founders are leveraging years of client contacts and knowledge of how large enterprises work to offer cost-efficient AI-led services. They know how to plug in agentic AI services to fix issues faster and cheaper than an IT incumbent can, experts said.
“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,” said Gaurav Parab, principal industry analyst for IT services at consultancy firm NelsonHall. “Without the baggage of legacy structures, they can innovate faster, capture niche opportunities such as sub-industry use cases that large firms overlook, and scale through networks they’ve built over decades.”
In one case, an entire set of senior executives in the healthcare unit of business process outsourcing company FirstSource left this February to start Simplify Alpha, ET research has shown.
ETtechThey include Venkatgiri Vandali, former president, healthcare and life sciences, and chief sales transformation officer at FirstSource, Deepan Vashi, executive vice president and global head of solutions, health plans and health services business, Anup Panthaloor, EVP for health plans & healthcare services, Harish Ramachandran, SVP for healthcare, and Govinandan Ranganathan, VP of business-process-as-a-service architecture.
“AI has neutralised the advantage of scale,” Vandali told ET. “Operating in silos — whether by capability, geography, or deal size — is a liability now, not a strength. Everyone wants to chase the hundred-million-dollar transformation. But the real, unmet demand is in the trenches — the two-million-dollar problems that are too complex for a junior team and too small for a global firm. We built Simplify Alpha to fill that exact gap. And the client’s appetite there is insatiable.”
He said their new venture has already partnered with a healthcare software provider and carved out and acquired their implementation practice with 400 engineers.
“The trigger for me was agentic AI,” said Jayaprakash Bandu, who recently left a senior leadership role at Mphasis to cofound an AI startup that is currently in stealth mode. “I spent 26 years in enterprise IT, and for the first time, I saw a technology shift where a small team could build in weeks what used to take hundreds of engineers and years. That is what made me step out and start building.”
For IT services companies, this exodus of talent is a double whammy. Not only do they have to deal with the disruption of talent leaving, but also face new competition that knows how they work.
In the case of FirstSource, for example, healthcare contributes over 30% to its revenue.
Parab of NelsonHall expects this trend of senior executives turning to founders to accelerate going forward.
Such founders are sought after by venture capitalists, industry observers said. AI services to enterprises is a hot investment sector and VCs want to back those with proven client connections.
In an AI services report late last year, Bessemer Venture Partners said the best founding team for an AI-enabled services startup would have “deep domain expertise of selling, building and delivering software in the target domain.”
The speed at which these executives can win clients is also crucial to the investment thesis.