Microsoft acquires team behind AI startup Cove

According to TechCrunch, Microsoft has hired the team behind Cove, an artificial intelligence-powered collaboration startup. Following the transition, Cove’s standalone service is shutting down on April 1, at which point the company will delete all user data. To manage the transition, Cove has refunded all customer subscriptions for March and is offering a data export process for its users to retrieve their information.

Cove was founded in late 2023 by Stephen Chau, Andy Szybalski, and Mike Chu, a team of engineers who previously worked on Google Maps features such as Street View. In 2024, the startup raised $6 million in a seed round—a form of early-stage funding. Investors in the round included Sequoia Capital, Elad Gil, Homebrew, Adverb, Scott Belsky, and Lenny Rachitsky.

The startup built a digital canvas tool designed as an infinite whiteboard. The founders developed the platform because they felt that standard chat interfaces for AI were not easily editable, whereas a canvas offered more flexibility for users working with different prompts. The tool allowed users to integrate a built-in browser, PDF documents, and images to provide context for the AI, which could then generate cards, tables, and lists for tasks like trip planning. This product positioned Cove as a competitor to digital whiteboard platforms such as Miro, TLDraw, and Kosmik.

The acquisition represents a shift for the team as they integrate into Microsoft’s AI division. “When we started Cove, we set out to reimagine how people collaborate with AI. As model capabilities have accelerated, our conviction in that mission has only grown stronger. We’re thrilled to continue this work at Microsoft AI, where we’ll have the opportunity to pursue an even bigger vision,” the company stated. Cove also noted that “the ideas behind it [Cove] will live on” within Microsoft, which previously added its Copilot AI assistant to its own Whiteboard collaboration product in 2023. TechCrunch reported that Microsoft did not immediately respond to requests for comment on how it plans to integrate Cove’s technology.

Why it matters

Microsoft’s move highlights the ongoing trend of tech giants acquiring specialized AI startups to absorb talent and intellectual property, effectively consolidating the market for AI-powered productivity tools.