Factory CEO accuses former advisor of spying for rival Cognition
Matan Grinberg says Chris Degnan breached confidentiality before joining Cognition as chief revenue officer, a claim Degnan denies
The AI coding race has a new subplot, and it reads more like a corporate thriller than a product launch.
Factory AI CEO Matan Grinberg has accused former board advisor Chris Degnan of breaching confidentiality through ongoing communications with rival Cognition AI. Degnan has since taken a job as Cognition’s chief revenue officer, and he says the allegations are wrong.
What Factory says happened
On September 30, 2026, Grinberg terminated Degnan from his role as a board observer and advisor at Factory. The stated reason was alleged breaches of confidentiality tied to Degnan’s contact with Cognition.
Degnan had held the advisory role since November 2025. That gave him roughly ten months inside a fast-growing startup, with a front-row seat to how it planned to compete.
Grinberg’s core concern is access. He alleged that Degnan sat in on board-level discussions covering Factory’s product roadmap and its competitive position in the market.
Grinberg has said Factory is left uncertain about how much information, if any, may have been shared.
Degnan’s side of the story
Degnan disputes the allegations. He has said he resigned from Factory before accepting the Cognition job, which frames his exit as a departure rather than a firing.
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He also said he did not share any proprietary information with Cognition. According to Degnan, Cognition never asked him for it in the first place.
Why Degnan was worth fighting over
Degnan is not a random name on an advisory page. Before Factory, he built his reputation at Snowflake, where he scaled the sales team into a leading position in its market.
Factory wanted his enterprise sales playbook, and Cognition evidently wanted it badly enough to make him chief revenue officer.
Two startups, one crowded market
Both companies build autonomous coding agents, software that can take on programming tasks with limited human hand-holding.
Factory has momentum on its side. The company raised $200 million in September 2026 at a $5 billion valuation, bringing its total funding to more than $400 million.
Factory counts Nvidia, Blackstone and Palo Alto Networks among its clients.
Cognition was founded in 2023 and reached unicorn status in 2024, meaning a private valuation of at least $1 billion, largely on the strength of its Devin AI coding agent.