Two former Datadog engineers have launched AI coding startup Niteshift with a $7 million seed round led by Greylock’s Jerry Chen. While modest by AI standards, the funding attracted notable angels including Reid Hoffman, Datadog’s Olivier Pomel and Alexis Lê-Quôc, and Ankur Goyal of Braintrust.
Founders Sajid Mehmood and Conor Branagan helped scale Datadog from its early days to a multi-billion dollar valuation. Now they’re entering the crowded AI coding space with a simple premise: companies won’t trust their most sensitive code assets directly to OpenAI and Anthropic, especially as these model makers expand into vertical software markets.
The timing reflects growing anxiety in enterprise software about what some call the “SaaSocalypse” – major AI companies moving aggressively into specialized business applications. This mirrors the earlier “retail apocalypse” when Amazon simultaneously provided cloud infrastructure while competing directly with retailers using those same services.
“At Datadog we saw this clearly,” said Mehmood, who serves as CEO. “A big part of our multicloud business came from e-commerce businesses who did not want to run on Amazon. We are absolutely going to see the same dynamic as Anthropic goes to compete in legal and healthcare and finance and whatever else.”
The company’s strategy centers on infrastructure that separates AI coding models from the orchestration needed to vet and maintain generated code. Niteshift doesn’t replace popular tools like Claude Code or Codex – instead, it routes between multiple models based on project needs, including open-source options.
“Being able to switch between GPT and cloud models is important,” Mehmood explained. “Everybody’s worried about getting stepped on by these giants.”
This model independence concept attracted Greylock’s Chen. “As the frontier labs move up the stack, there’s an opportunity to offer customers an alternate path: unbundling their agents from the infrastructure they run on,” he said.
Niteshift’s business model also differs from competitors. Rather than selling AI tokens, the company charges like a cloud provider with per-minute usage rates. “Everybody else is selling labor replacement intelligence,” Mehmood said. “We’re selling software to agents, as opposed to humans – but we’re still out here selling software.”
The startup faces significant competition in the AI coding space:
- Cursor, potentially facing acquisition by SpaceX
- Cognition, which recently raised $1 billion at a $26 billion valuation
- Amazon Bedrock’s enterprise offerings
- OpenRouter, an AI gateway platform that raised $113 million at $1.3 billion valuation
Mehmood argues the founding team’s experience gives Niteshift an edge. Both founders lived through scaling challenges that large engineering organizations now face with AI-generated code. They understand the complexities of running, testing, and verifying software autonomously in production environments.
The bet reflects broader enterprise concerns about AI vendor dependence. As major model makers expand beyond infrastructure into applications, companies increasingly seek alternatives that provide flexibility without strategic conflicts. Whether this demand proves large enough to support another AI coding platform remains to be seen, but early investor interest suggests the market sees potential in Niteshift’s approach.
