Vinod Khosla, founder of Khosla Ventures, faced criticism after publicly siding with Cognition in a dispute involving Factory and Chris Degnan, a former Factory board observer and advisor who joined Cognition as chief revenue officer. Factory CEO Matan Grinberg said Factory terminated Degnan over recurring discussions with Cognition executives while he had access to confidential information and alleged Cognition employees posed as Factory job candidates to gather internal information. Degnan said he resigned after disclosing plans to join Cognition, denied sharing Factory information and disputed Factory’s account. Cognition CEO Scott Wu denied improper information gathering. The dispute highlighted conflicts created when venture firms invest in competing AI startups: Factory raised $200 million at a $5 billion valuation, while Cognition raised more than $2 billion at a $48 billion valuation.