Factory CEO Accuses Chris Degnan of Spying for $48 Billion Rival Cognition

3 articles · Updated · TechCrunch · Sep 30

Matan Grinberg said he removed Chris Degnan as a Factory board adviser after learning the VC had been in talks with Cognition, which Grinberg calls Factory’s biggest competitor.
Degnan joined Cognition as chief revenue officer within hours of the accusation and denied sharing confidential information, saying he resigned rather than was fired and had not spoken to Cognition before his last Factory board meeting.
The dispute centers on whether Degnan used board access while exploring the move: Grinberg said Degnan had asked about Factory’s roadmap and parity gap, while Degnan said Grinberg instead offered him a full-time Factory job when he disclosed the switch.
The clash has drawn in investors around two richly valued AI coding startups—Factory raised $200 million at a $5 billion valuation this month, while Cognition raised $2 billion at a $48 billion valuation.
Khosla Ventures, which backs both companies, split publicly as Vinod Khosla attacked Grinberg’s account and partner Keith Rabois called interviewing with a competitor during board service unethical, underscoring wider scrutiny of board-level conflicts in AI.