Cognition engineers allegedly conducted fake interviews with staff at Factory to obtain proprietary product information, according to a statement from the company's leadership. These actions coincided with Factory's decision to terminate Christopher Degnan's role as a board observer and advisor for unethical conduct. The firm discovered that Degnan, who had served for over a year, had secret and recurring conversations with Cognition executives immediately after providing guidance on confidential board-level matters.

Factory develops model-agnostic coding agents and claims that Cognition, the creator of Devin, has fallen behind in security, cost, and quality. The startup has experienced rapid scaling, with its revenue increasing 100x and its team growing 10x year over year. The conflict over Degnan's confidentiality obligations highlights intensifying competition among AI firms in San Francisco as they vie for dominance in the software factory product market.