Factory CEO Matan Grinberg alleges Cognition's new CRO Chris Degnan had been confiding with Cognition executives while advising Factory as a board observer (Rya Jetha/Business Insider)

The public dispute between Factory and Cognition underscores how quickly competitive tensions, talent mobility, and governance issues can surface in the fast-moving AI coding-agent market. For CIOs, the bigger takeaway is that vendor relationships with early-stage AI startups can be fragile and may carry strategic, confidentiality, and continuity risks that affect platform selection and long-term roadmaps.