A bitter talent fight between two Silicon Valley AI coding startups has spilled into public view, with the two chief executives trading accusations on X and prominent venture capitalist Vinod Khosla — an investor in both companies — stepping in to take a side.
The allegation
Factory AI chief executive Matan Grinberg announced that the company had terminated Chris Degnan, who served as a board observer and adviser to Factory, alleging that he had passed information to rival Cognition. In a detailed statement, Grinberg accused Cognition of secretly gathering intelligence about Factory's confidential plans, writing that Cognition had "decided to throw their weight and money at people with direct knowledge of our most confidential plans."
Grinberg further alleged that Degnan had been confiding with executives of the rival company for weeks while sitting in Factory's board meetings and advising its leadership, adding that he did not know the extent of the information shared.
The denials
Cognition chief executive Scott Wu firmly rejected the claims. He said Cognition had no interest in Factory's information, that Degnan had never brought it up, and that the company would never ask anyone to collect intelligence on a competitor under the table. Wu said Degnan, who advises at least ten companies, had informed Factory he was resigning as an adviser before the dispute erupted publicly.
Degnan himself also disputed Factory's version. He said he was not fired — he resigned — and had told Grinberg he intended to join Cognition. According to Degnan, the last Factory board meeting he attended was weeks before he had ever spoken to Cognition, and Cognition never asked him for Factory's information, nor would he ever share it.
Khosla intervenes
As the exchange heated up online, Vinod Khosla weighed in publicly against Factory AI's chief executive, calling the company a "struggling second tier competitor" and accusing Grinberg of lying out of desperation. The intervention drew attention because Khosla's firm has backed both companies in the AI coding race.
The clash underscores how intense the battle for AI coding talent has become. Both companies have raised major funding rounds recently in a market where investors are pouring billions into tools that promise to automate software development.
Sources:
- Two rival CEOs of Silicon Valley AI companies fight over an employee. Vinod Khosla, an investor in both, steps in
The allegation
Factory AI chief executive Matan Grinberg announced that the company had terminated Chris Degnan, who served as a board observer and adviser to Factory, alleging that he had passed information to rival Cognition. In a detailed statement, Grinberg accused Cognition of secretly gathering intelligence about Factory's confidential plans, writing that Cognition had "decided to throw their weight and money at people with direct knowledge of our most confidential plans."
Grinberg further alleged that Degnan had been confiding with executives of the rival company for weeks while sitting in Factory's board meetings and advising its leadership, adding that he did not know the extent of the information shared.
The denials
Cognition chief executive Scott Wu firmly rejected the claims. He said Cognition had no interest in Factory's information, that Degnan had never brought it up, and that the company would never ask anyone to collect intelligence on a competitor under the table. Wu said Degnan, who advises at least ten companies, had informed Factory he was resigning as an adviser before the dispute erupted publicly.
Degnan himself also disputed Factory's version. He said he was not fired — he resigned — and had told Grinberg he intended to join Cognition. According to Degnan, the last Factory board meeting he attended was weeks before he had ever spoken to Cognition, and Cognition never asked him for Factory's information, nor would he ever share it.
Khosla intervenes
As the exchange heated up online, Vinod Khosla weighed in publicly against Factory AI's chief executive, calling the company a "struggling second tier competitor" and accusing Grinberg of lying out of desperation. The intervention drew attention because Khosla's firm has backed both companies in the AI coding race.
The clash underscores how intense the battle for AI coding talent has become. Both companies have raised major funding rounds recently in a market where investors are pouring billions into tools that promise to automate software development.
Sources:
- Two rival CEOs of Silicon Valley AI companies fight over an employee. Vinod Khosla, an investor in both, steps in
