Overview
- Factory chief Matan Grinberg said on Wednesday he terminated board advisor Chris Degnan after alleging Degnan had recurring contact with Cognition executives while attending confidential Factory meetings.
- Hours later on Wednesday Degnan announced he has joined Cognition as chief revenue officer and denied the accusations, saying he resigned from Factory before taking the role and did not share proprietary information.
- Degnan served as a board observer at Factory since November 2025, giving him access to product roadmaps and competitive strategy that Grinberg says make the allegation of information sharing especially concerning.
- The dispute comes after both startups closed large fundraises this month, with Factory raising $200 million at a $5 billion valuation and Cognition raising about $2 billion at a $48 billion valuation, which increases the commercial value of sales and roadmap knowledge.
- No legal action has been announced and the facts about what, if any, confidential material changed hands remain unresolved, but the episode spotlights potential conflicts when VC-linked advisors move between competing AI firms and could trigger policy or governance changes.