Factory AI Accuses Cognition of Corporate Espionage
Factory AI CEO Matan Grinberg accused former advisor Chris Degnan and competitor Cognition of using fake interviews to steal internal intelligence.
A public dispute has erupted between San Francisco-based AI coding startups Factory AI and Cognition following the departure of Chris Degnan. Degnan, a former board observer and advisor to Factory, recently joined Cognition as chief revenue officer.
Factory CEO Matan Grinberg alleged that Degnan maintained recurring conversations with Cognition executives while accessing confidential Factory information. Grinberg further claimed that Cognition employees faked job interviews to gather internal intelligence on Factory. Degnan and Cognition CEO Scott Wu denied these allegations, with Degnan asserting that he resigned and informed Grinberg of his move.
The conflict has created a divide among investors at Khosla Ventures. Managing director Keith Rabois described Degnan's actions as unethical, while founder Vinod Khosla characterized Factory as a "struggling second tier competitor." The feud follows a period of massive growth for both firms, with Factory recently valued at $5 billion and Cognition at $48 billion.
