Factory CEO accuses VC board advisor of spying for competitor Cognition

A high-profile dispute has erupted in the startup ecosystem after the CEO of Factory AI publicly accused Chris Degnan, a venture capitalist and former board advisor to the company, of espionage. The controversy centers on Degnan’s recent appointment as the Chief Revenue Officer at Cognition, a direct competitor to Factory. The accusation, which has sparked a heated debate on X, centers on concerns regarding the potential transfer of proprietary information and strategic insights gained during Degnan's tenure as an advisor. While the situation highlights the complex nature of board relationships and non-compete dynamics in the competitive AI sector, it also underscores the growing tension between startups and the venture capital firms that support them. Neither party has provided further legal documentation, but the public nature of the allegations has drawn significant attention to the ethical boundaries of board advisory roles in the fast-moving artificial intelligence industry.