A boardroom exit has two multibillion-dollar AI startups trading accusations
AI startups Factory AI and Cognition are engaged in a public dispute following the departure of a board advisor who joined Cognition. Factory alleges that the advisor shared confidential information and that Cognition employees used deceptive tactics to gain internal data, claims which both the advisor and Cognition deny.
Why it matters
This conflict highlights the intense competition and ethical tensions within the rapidly growing AI coding agent market.
Cognition CEO Scott Wu Kent NISHIMURA / AFP via Getty Images Startup Factory AI says a former advisor held meetings with rival Cognition while advising the company. Factory also alleges Cognition employees posed as job applicants to seek product information. Degnan, the former board member, and Cognition deny that information about Factory was sought or shared. Factory AI and Cognition , two high-profile San Francisco-based AI startups building coding agents, are publicly feuding over the departure of a former Factory board observer and advisor who is joining Cognition as chief revenue officer. Factory CEO Matan Grinberg posted on X on Wednesday that the company had terminated Chris Degnan 's role after learning that he had been holding recurring conversations with Cognition executives while advising Factory on confidential matters.
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