Microsoft announced major expansions to its Fabric IQ semantic intelligence platform this week, aimed at addressing coordination issues between enterprise AI agents operating on different systems. The company also confirmed it has hired the team from Sequoia-backed AI collaboration startup Cove, which will shut down its service on April 1.

The centerpiece of Microsoft's announcements is making Fabric IQ's business ontology accessible through the Model Context Protocol (MCP) to AI agents from any vendor, not just Microsoft's own systems. Previously debuted in November 2025, Fabric IQ acts as a semantic layer that provides shared business context to AI systems. According to Amir Netz, CTO of Microsoft Fabric, the goal is to ensure all AI agents share common understanding of business entities like customers, orders, and regions.

Microsoft is positioning this expansion as a solution to what it describes as a growing problem in enterprise AI deployments. When AI agents built on different platforms operate with divergent interpretations of business data, it can lead to coordination failures and inconsistent decision-making across organizations. The new MCP access allows agents from different vendors to query the same unified context layer.

Alongside the Fabric IQ updates, Microsoft introduced a Database Hub in early access that consolidates management of Azure SQL, Cosmos DB, PostgreSQL, MySQL and SQL Server databases under a single interface. The company also announced that Fabric data agents have reached general availability and added enterprise planning capabilities that unify historical data with real-time signals and organizational goals.

Industry analysts see potential in Microsoft's integrated approach but note implementation challenges remain. Robert Kramer of Moor Insights and Strategy highlighted Microsoft's advantage through its broad technology stack, while cautioning that success depends on whether the new capabilities actually reduce integration complexity for enterprises operating multiple AI systems.

The acquisition of Cove's team represents Microsoft's continued investment in AI collaboration tools. Cove had developed an AI-powered collaboration platform before deciding to join Microsoft. The startup will cease operations and delete customer data as part of the transition, marking another example of talent acquisition in the competitive AI landscape.