Factory CEO Accuses Former Board Advisor of Spying After Move to Rival Cognition

A public feud has broken out between two of the most closely watched AI coding startups. The CEO of Factory AI has accused Chris Degnan, a venture capitalist who served as an advisor to Factory's board, of spying for competitor Cognition.

The accusation follows news that Degnan has taken a job as chief revenue officer at Cognition, the company behind the Devin coding agent. Degnan had held a board advisory role at Factory, a position that typically gives someone access to sensitive material such as sales strategy, pipeline details, pricing and product roadmaps.

The source report does not detail what evidence the Factory CEO has for the claim, and there is no indication so far that any legal action has been filed. Claims of spying are serious, and at this stage they remain allegations. Neither Degnan nor Cognition's response is included in the material available to us.

The episode highlights a recurring tension in venture-backed startups. Advisors and investors see confidential information from several companies, sometimes in the same market. Board observers and advisors are usually bound by confidentiality terms, but moving from a VC seat to a senior operating role at a direct rival is unusual, and it invites exactly this kind of suspicion.

It also shows how heated the AI coding agent market has become. Factory and Cognition are competing for the same enterprise customers, the same engineering talent and the same investor attention, all in a category where large incumbents and well-funded newcomers are racing to win developer workflows. A chief revenue officer hire at a company like Cognition signals a push to scale sales, which makes inside knowledge of a competitor's go-to-market particularly valuable, at least in theory.

What happens next will likely depend on whether Factory can substantiate its claim and whether any confidentiality or conflict-of-interest agreements were breached. For now, the dispute is a reminder that in fast-moving AI sectors, the lines between investor, advisor and competitor can blur quickly, and that founders are increasingly willing to air those grievances in public.