Factory CEO Matan Grinberg said Wednesday that the AI coding startup has terminated Chris Degnan as a board observer and advisor, accusing him of allegedly violating confidentiality obligations by maintaining undisclosed, recurring conversations with rival Cognition.
The development comes as Degnan publicly announced that he is joining Cognition as its chief revenue officer, moving from an advisory role at Factory to an executive position at the company.
"I’m super excited to join Cognition as its Chief Revenue Officer," Degnan said in a post on X announcing the move. He described Cognition as another "rocket ship" and said customer feedback about Devin convinced him the opportunity was "once-in-a-lifetime."
Benzinga contacted Factory AI and Cognition for comment but did not receive a response at the time of publication.
Grinberg, however, said in a post on X that Degnan had been advising Factory for more than a year and had access to confidential board-level information while also speaking with executives at Cognition, the company behind AI coding agent Devin.
"Yesterday, I made the decision to immediately terminate Christopher Degnan’s roles as a Board Observer and Advisor to Factory," Grinberg said
According to Grinberg, Degnan initially described his contact with a Cognition executive as a casual, one-off conversation; Grinberg later learned that the discussions were formal and recurring. Grinberg said Degnan advised Factory on confidential matters as recently as Monday, then told him that evening that the relationship with Cognition had been more extensive than previously disclosed.
"While he sat in our board meetings and advised our leadership team, he was also confiding with executives of our largest competitor," Grinberg wrote.
Grinberg did not specify what information Degnan may have shared with Cognition and said Factory does not know the extent of the disclosure.
He also pointed to questions Degnan had recently asked about Factory’s product roadmap and what Grinberg described as the company’s "parity gap" with competitors, saying those questions took on a different significance in light of the newly disclosed conversations.
Degnan did not directly address Grinberg’s allegations in his public announcement of joining Cognition.
Instead, he highlighted his previous experience helping build Snowflake’s sales organization and said he was excited to work with Cognition CEO Scott Wu, President Russell Kaplan, and the broader team.
"While I am not jumping on as the first sales rep this time, I can’t wait to dive in and help drive amazing customer outcomes while building a world-class sales team," Degnan wrote.
Degnan joined Factory as an advisor in November 2025 after more than a decade at Snowflake, where he was the company’s first sales hire and eventually became chief revenue officer. Snowflake announced his retirement from the CRO role in March 2025.
At the time of his Factory appointment, the company described Degnan as bringing “extensive experience” in enterprise sales and scaling technology businesses.
In his post, Grinberg also accused Cognition engineers of posing as candidates during interviews with Factory in an effort to obtain information about the company’s products. He said Factory’s decision to cut ties with Degnan was ultimately about maintaining trust around its confidential information.
"Trust in Board Membership is one of the sacred bonds in Silicon Valley," Grinberg said. "With it comes an enormous responsibility. That trust was violated."
Photo: Shutterstock