The strain is already visible elsewhere. In late September, Factory, which builds an AI agent for writing software, said it was firing board observer and adviser Chris Degnan over what it called "unethical conduct involving Cognition", the maker of the rival Devin coding agent. Factory's CEO alleged Degnan had discussed a job at Cognition while privy to Factory's board-level discussions. Degnan said he had already resigned, denied sharing anything confidential, and soon joined Cognition as chief revenue officer.

The dispute split investors. Vinod Khosla, whose firm backs both companies, publicly sided with Degnan on X, calling Factory "a struggling second tier competitor".

Benchmark's partners framed the problem in different ways. Chetan Puttagunta argued AI is accelerating it: as the cost of building software "effectively goes to zero", founders see a bigger "surface area" to claim, so collisions between portfolio companies will "probably" happen more. Peter Fenton called the issue "kryptonite" and the firm's toughest problem, placing Benchmark nearer the co-founder end of a spectrum that runs from hands-on partner to passive stock picker. Vishria said Benchmark keeps what it learns confidential and downplayed the risk, noting "We are not product or technology experts."

The firm is not declaring the old pact dead. Vishria said exclusivity remains "really important" at the very early stage Benchmark favours, even as "things are evolving". Fenton added that transparency is the firm's golden rule: "There shouldn't be the surprise after the fact."