Key facts
- Factory CEO Matan Grinberg accused former board advisor Chris Degnan of spying for rival Cognition.
- Grinberg stated Degnan was terminated from his advisory role at Factory after allegedly sharing confidential information with Cognition.
- Degnan announced he joined Cognition as chief revenue officer, denying Grinberg's allegations.
- Factory recently raised $200 million at a $5 billion valuation.
- Competitor Cognition raised over $2 billion at a $48 billion valuation earlier this month.
Factory CEO Matan Grinberg publicly accused Chris Degnan, a former board observer and advisor to the AI startup, of spying for its primary competitor, Cognition. Grinberg posted on X that Factory terminated Degnan's role after learning he had been in recurring conversations with Cognition executives while advising Factory on confidential matters.
Hours after Grinberg's accusations, Degnan announced on social media that he had resigned from Factory and joined Cognition as its chief revenue officer. Degnan denied Grinberg's claims, stating that he had informed Grinberg of his move to Cognition and that he would "never give" competitor information.
Cognition CEO Scott Wu also disputed Grinberg's allegations that Cognition employees had posed as job candidates to gather information about Factory's products. Wu wrote on X that Cognition would "never ask our engineers or anyone on our team to collect info about any competitor under-the-table."
The dispute comes weeks after both AI coding startups announced significant funding rounds, with Factory raising $200 million at a $5 billion valuation and Cognition securing over $2 billion at a $48 billion valuation.