AI coding startup funding frenzy continues amid ecosystem conflict

Cognition reportedly reached a $1B annualized revenue run rate, raised $2B at a reported $48B valuation, and launched lower-cost SWE-2, while Factory raised $200M at a reported $5B valuation. The market is broadening toward software factories, air-gapped execution, model agnosticism, and lower-cost inference, but margins, retention, and autonomous-work claims remain unproven.