GoKawiilBenchmark partners say AI competition is breaking VC's no-rival-backing norm
At TechCrunch Disrupt, Benchmark partner Eric Vishria said the long-standing venture capital norm against funding directly competing startups is becoming unsustainable as AI companies rapidly pivot into overlapping markets. His comments followed a public dispute between AI coding startups Factory and Cognition, after Factory fired an adviser for allegedly discussing a job with Cognition while sitting in on Factory's board discussions, prompting investor Vinod Khosla—who backs both firms—to publicly criticize Factory.
GoKawiil's interpretation of the reporting above, not reported fact.
The remarks suggest that fast-moving AI competition could be forcing VCs to abandon a decades-old convention meant to protect founders' trust and confidential strategy. If firms increasingly fund rival AI startups, founders may need to rethink how much they can safely share with investors, and conflicts like the Factory-Cognition dispute could become more common across the industry.
- Benchmark partners publicly acknowledged the VC norm against backing rival startups is weakening amid AI's rapid growth.
- The admission follows a dispute between AI coding startups Factory and Cognition over an adviser's alleged conflict of interest.
- Investor Vinod Khosla, who backs both companies, publicly sided against Factory, highlighting overlapping investor interests in AI.
Source: techcrunch.com — Connie Loizos, 2026-10-16
Published there as: “Even Benchmark thinks AI is eroding the venture pact against backing rivals”
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