Microsoft Hires Team Behind Sequoia-Backed AI Startup Cove

Microsoft has completed another acqui-hire in the AI sector. The team behind Cove — an AI-powered collaboration platform backed by Sequoia Capital — is joining Microsoft. The Cove service is shutting down, with customers notified via email.

Cove had built an intelligent collaboration canvas where AI could create cards, tables, and lists based on context from browsers, PDFs, and images. The product was envisioned as an alternative to traditional project tools, but with deeper AI integration.

The acqui-hire is part of Microsoft's aggressive strategy to bring AI talent directly into its Copilot organization. Satya Nadella is now unifying commercial and consumer Copilot under new leader Jacob Andreou, absorbing external expertise to accelerate development.

For Sequoia and other Cove investors, the shutdown likely means a loss, as an acqui-hire rarely delivers full returns on invested capital. The pattern is familiar: large tech companies extract the talent without paying the full acquisition price.

The trend of acqui-hires in the AI sector is accelerating. Instead of building their own teams from scratch or paying billions for acquisitions, companies like Microsoft, Google, and Meta are taking over startup teams and letting the products die.