The heads of two AI coding startups are fighting in public over an adviser who switched sides, as Carmen Arroyo reported for Bloomberg.

Factory chief executive Matan Grinberg said on X on Wednesday that he was cutting ties with Chris Degnan, an adviser of about a year. Degnan was later named chief revenue officer at Cognition, a much larger rival.

Grinberg alleged that Degnan held talks with Cognition while hearing private discussions about Factory’s business.

“It is sad to sever a relationship with someone who has been a trusted advisor – and even a close friend – for over a year. But Chris’s conduct is unacceptable to me,” he wrote.

Denials all round

Degnan, a former chief revenue officer at Snowflake, said he had resigned on Monday and turned down a full-time job at Factory.

“Cognition has never asked about information on Factory, nor would I ever give it,” he wrote on X.

Cognition chief executive Scott Wu also rejected the claims. Its chief legal officer, Paul Grewal, said the company hired Degnan because he is known as one of the world’s best sales leaders.

“We have never tried to get confidential information on Factory,” Grewal said.

Investors pile in

Vinod Khosla, whose firm has backed both startups, sided with Degnan and accused Grinberg of lying, Forbes reported.

“You are a struggling second tier competitor,” Khosla wrote.

Sequoia Capital’s Shaun Maguire, a Factory investor, took the other side.

“What Cognition doesn’t understand is that we’re sitting on a nuclear weapon to end them,” he posted.

The stakes are high. Cognition, maker of the Devin coding agent, raised money at a $48bn valuation in September. That month, Factory raised $200mn at $5bn, with Khosla Ventures and Sequoia among its backers.

Cognition’s value has jumped since it raised at $26bn. Factory, Grinberg and Degnan did not reply to Bloomberg’s requests for comment.