diff --git a/app/gui/src/dashboard/App.tsx b/app/gui/src/dashboard/App.tsx
index 9a6deee3dcd9..db72c7ce26fd 100644
--- a/app/gui/src/dashboard/App.tsx
+++ b/app/gui/src/dashboard/App.tsx
@@ -50,7 +50,6 @@ import * as inputBindingsModule from '#/configurations/inputBindings'
 
 import AuthProvider, * as authProvider from '#/providers/AuthProvider'
 import BackendProvider, { useLocalBackend } from '#/providers/BackendProvider'
-import DriveProvider from '#/providers/DriveProvider'
 import { useHttpClientStrict } from '#/providers/HttpClientProvider'
 import InputBindingsProvider from '#/providers/InputBindingsProvider'
 import LocalStorageProvider, * as localStorageProvider from '#/providers/LocalStorageProvider'
@@ -98,7 +97,6 @@ import { STATIC_QUERY_OPTIONS } from '#/utilities/reactQuery'
 
 import { useInitAuthService } from '#/authentication/service'
 import { InvitedToOrganizationModal } from '#/modals/InvitedToOrganizationModal'
-import { CategoriesProvider } from './layouts/Drive/Categories/categoriesHooks'
 
 // ============================
 // === Global configuration ===
@@ -536,20 +534,14 @@ function AppRouter(props: AppRouterProps) {
               onAuthenticated={onAuthenticated}
             >
               <InputBindingsProvider inputBindings={inputBindings}>
-                <CategoriesProvider>
-                  {/* Ideally this would be in `Drive.tsx`, but it currently must be all the way out here
-                   * due to modals being in `TheModal`. */}
-                  <DriveProvider>
-                    <LocalBackendPathSynchronizer />
-                    <VersionChecker />
-                    {routes}
-                    <suspense.Suspense>
-                      <errorBoundary.ErrorBoundary>
-                        <devtools.EnsoDevtools />
-                      </errorBoundary.ErrorBoundary>
-                    </suspense.Suspense>
-                  </DriveProvider>
-                </CategoriesProvider>
+                <LocalBackendPathSynchronizer />
+                <VersionChecker />
+                {routes}
+                <suspense.Suspense>
+                  <errorBoundary.ErrorBoundary>
+                    <devtools.EnsoDevtools />
+                  </errorBoundary.ErrorBoundary>
+                </suspense.Suspense>
               </InputBindingsProvider>
             </AuthProvider>
           </BackendProvider>
diff --git a/app/gui/src/dashboard/layouts/CategorySwitcher.tsx b/app/gui/src/dashboard/layouts/CategorySwitcher.tsx
index f6b08477ba1b..278e517eece5 100644
--- a/app/gui/src/dashboard/layouts/CategorySwitcher.tsx
+++ b/app/gui/src/dashboard/layouts/CategorySwitcher.tsx
@@ -55,7 +55,7 @@ interface CategoryMetadata {
 /** Props for a {@link CategorySwitcherItem}. */
 interface InternalCategorySwitcherItemProps extends CategoryMetadata {
   readonly currentCategory: Category
-  readonly setCategory: (category: Category) => void
+  readonly setCategoryId: (categoryId: Category['id']) => void
   readonly badgeContent?: React.ReactNode
   readonly isDisabled: boolean
 }
@@ -71,7 +71,7 @@ const CATEGORY_SWITCHER_VARIANTS = tv({
 
 /** An entry in a {@link CategorySwitcher}. */
 function CategorySwitcherItem(props: InternalCategorySwitcherItemProps) {
-  const { currentCategory, setCategory, badgeContent, isDisabled: isDisabledRaw } = props
+  const { currentCategory, setCategoryId, badgeContent, isDisabled: isDisabledRaw } = props
   const { isNested = false, category, icon, label, buttonLabel, dropZoneLabel } = props
 
   const [isTransitioning, startTransition] = React.useTransition()
@@ -126,7 +126,7 @@ function CategorySwitcherItem(props: InternalCategorySwitcherItemProps) {
       // and to not invoke the Suspense boundary.
       // This makes the transition feel more responsive and natural.
       startTransition(() => {
-        setCategory(category)
+        setCategoryId(category.id)
       })
     }
   })
@@ -221,12 +221,12 @@ function CategorySwitcherItem(props: InternalCategorySwitcherItemProps) {
 /** Props for a {@link CategorySwitcher}. */
 export interface CategorySwitcherProps {
   readonly category: Category
-  readonly setCategory: (category: Category) => void
+  readonly setCategoryId: (categoryId: Category['id']) => void
 }
 
 /** A switcher to choose the currently visible assets table categoryModule.categoryType. */
 function CategorySwitcher(props: CategorySwitcherProps) {
-  const { category, setCategory } = props
+  const { category, setCategoryId } = props
 
   const { getText } = textProvider.useText()
   const [, setSearchParams] = useSearchParams()
@@ -237,7 +237,7 @@ function CategorySwitcher(props: CategorySwitcherProps) {
   const cloudCategories = useCloudCategoryList()
   const localCategories = useLocalCategoryList()
 
-  const itemProps = { currentCategory: category, setCategory, dispatchAssetEvent }
+  const itemProps = { currentCategory: category, setCategoryId, dispatchAssetEvent }
 
   const {
     cloudCategory,
diff --git a/app/gui/src/dashboard/layouts/Drive.tsx b/app/gui/src/dashboard/layouts/Drive.tsx
index 6100f8d316ae..b07fc5778ff1 100644
--- a/app/gui/src/dashboard/layouts/Drive.tsx
+++ b/app/gui/src/dashboard/layouts/Drive.tsx
@@ -39,6 +39,7 @@ import { useQueryClient, useSuspenseQuery } from '@tanstack/react-query'
 import { useDeferredValue, useEffect } from 'react'
 import { toast } from 'react-toastify'
 import { Suspense } from '../components/Suspense'
+import { useCategoriesAPI } from './Drive/Categories/categoriesHooks'
 import { useDirectoryIds } from './Drive/directoryIdsHooks'
 
 // =============
@@ -47,10 +48,6 @@ import { useDirectoryIds } from './Drive/directoryIdsHooks'
 
 /** Props for a {@link Drive}. */
 export interface DriveProps {
-  readonly category: Category
-  readonly setCategory: (category: Category) => void
-  readonly setCategoryId: (categoryId: Category['id']) => void
-  readonly resetCategory: () => void
   readonly hidden: boolean
   readonly initialProjectName: string | null
   readonly assetsManagementApiRef: React.Ref<assetsTable.AssetManagementApi>
@@ -60,13 +57,13 @@ const CATEGORIES_TO_DISPLAY_START_MODAL = ['cloud', 'local', 'local-directory']
 
 /** Contains directory path and directory contents (projects, folders, secrets and files). */
 function Drive(props: DriveProps) {
-  const { category, resetCategory } = props
-
   const { isOffline } = offlineHooks.useOffline()
   const toastAndLog = toastAndLogHooks.useToastAndLog()
   const { user } = authProvider.useFullUserSession()
   const localBackend = backendProvider.useLocalBackend()
   const { getText } = textProvider.useText()
+  const categoriesAPI = useCategoriesAPI()
+  const { category, resetCategory, setCategory } = categoriesAPI
 
   const isCloud = categoryModule.isCloudCategory(category)
 
@@ -128,7 +125,7 @@ function Drive(props: DriveProps) {
           }}
         >
           <Suspense>
-            <DriveAssetsView {...props} />
+            <DriveAssetsView {...props} category={category} setCategory={setCategory} />
           </Suspense>
         </ErrorBoundary>
       )
@@ -136,14 +133,21 @@ function Drive(props: DriveProps) {
   }
 }
 
+/**
+ * Props for a {@link DriveAssetsView}.
+ */
+interface DriveAssetsViewProps extends DriveProps {
+  readonly category: Category
+  readonly setCategory: (categoryId: Category['id']) => void
+}
+
 /**
  * The assets view of the Drive.
  */
-function DriveAssetsView(props: DriveProps) {
+function DriveAssetsView(props: DriveAssetsViewProps) {
   const {
     category,
     setCategory,
-    setCategoryId,
     hidden = false,
     initialProjectName,
     assetsManagementApiRef,
@@ -254,7 +258,7 @@ function DriveAssetsView(props: DriveProps) {
 
         <div className="flex flex-1 gap-drive overflow-hidden">
           <div className="flex w-36 flex-none flex-col gap-drive-sidebar overflow-y-auto overflow-x-hidden py-drive-sidebar-y">
-            <CategorySwitcher category={category} setCategory={setCategory} />
+            <CategorySwitcher category={category} setCategoryId={setCategory} />
 
             {isCloud && (
               <Labels
@@ -280,7 +284,7 @@ function DriveAssetsView(props: DriveProps) {
                   size="small"
                   className="mx-auto"
                   onPress={() => {
-                    setCategoryId('local')
+                    setCategory('local')
                   }}
                 >
                   {getText('switchToLocal')}
diff --git a/app/gui/src/dashboard/pages/dashboard/Dashboard.tsx b/app/gui/src/dashboard/pages/dashboard/Dashboard.tsx
index 92ad8203e076..f56c63b29c98 100644
--- a/app/gui/src/dashboard/pages/dashboard/Dashboard.tsx
+++ b/app/gui/src/dashboard/pages/dashboard/Dashboard.tsx
@@ -10,6 +10,8 @@ import { DashboardTabBar } from './DashboardTabBar'
 
 import * as eventCallbacks from '#/hooks/eventCallbackHooks'
 import * as projectHooks from '#/hooks/projectHooks'
+import { CategoriesProvider } from '#/layouts/Drive/Categories/categoriesHooks'
+import DriveProvider from '#/providers/DriveProvider'
 
 import * as authProvider from '#/providers/AuthProvider'
 import * as backendProvider from '#/providers/BackendProvider'
@@ -43,7 +45,6 @@ import * as backendModule from '#/services/Backend'
 import * as localBackendModule from '#/services/LocalBackend'
 import * as projectManager from '#/services/ProjectManager'
 
-import type { Category } from '#/layouts/CategorySwitcher/Category'
 import { useCategoriesAPI } from '#/layouts/Drive/Categories/categoriesHooks'
 import { baseName } from '#/utilities/fileInfo'
 import { tryFindSelfPermission } from '#/utilities/permissions'
@@ -68,11 +69,17 @@ export interface DashboardProps {
 /** The component that contains the entire UI. */
 export default function Dashboard(props: DashboardProps) {
   return (
-    <EventListProvider>
-      <ProjectsProvider>
-        <DashboardInner {...props} />
-      </ProjectsProvider>
-    </EventListProvider>
+    <CategoriesProvider>
+      {/* Ideally this would be in `Drive.tsx`, but it currently must be all the way out here
+       * due to modals being in `TheModal`. */}
+      <DriveProvider>
+        <EventListProvider>
+          <ProjectsProvider>
+            <DashboardInner {...props} />
+          </ProjectsProvider>
+        </EventListProvider>
+      </DriveProvider>
+    </CategoriesProvider>
   )
 }
 
@@ -114,10 +121,6 @@ function DashboardInner(props: DashboardProps) {
 
   const categoriesAPI = useCategoriesAPI()
 
-  const setCategory = eventCallbacks.useEventCallback((newCategory: Category) => {
-    categoriesAPI.setCategory(newCategory.id)
-  })
-
   const projectsStore = useProjectsStore()
   const page = usePage()
   const launchedProjects = useLaunchedProjects()
@@ -281,10 +284,6 @@ function DashboardInner(props: DashboardProps) {
             initialProjectName={initialProjectName}
             ydocUrl={ydocUrl}
             assetManagementApiRef={assetManagementApiRef}
-            category={categoriesAPI.category}
-            setCategory={setCategory}
-            setCategoryId={categoriesAPI.setCategory}
-            resetCategory={categoriesAPI.resetCategory}
           />
         </aria.Tabs>
 
diff --git a/app/gui/src/dashboard/pages/dashboard/DashboardTabPanels.tsx b/app/gui/src/dashboard/pages/dashboard/DashboardTabPanels.tsx
index f39d1279c667..1bfc4641b2f8 100644
--- a/app/gui/src/dashboard/pages/dashboard/DashboardTabPanels.tsx
+++ b/app/gui/src/dashboard/pages/dashboard/DashboardTabPanels.tsx
@@ -7,7 +7,6 @@ import { Suspense } from '#/components/Suspense'
 import { useEventCallback } from '#/hooks/eventCallbackHooks'
 import { useOpenProjectMutation, useRenameProjectMutation } from '#/hooks/projectHooks'
 import type { AssetManagementApi } from '#/layouts/AssetsTable'
-import type { Category } from '#/layouts/CategorySwitcher/Category'
 import Drive from '#/layouts/Drive'
 import type { GraphEditorRunner } from '#/layouts/Editor'
 import Editor from '#/layouts/Editor'
@@ -22,24 +21,11 @@ export interface DashboardTabPanelsProps {
   readonly initialProjectName: string | null
   readonly ydocUrl: string | null
   readonly assetManagementApiRef: React.RefObject<AssetManagementApi> | null
-  readonly category: Category
-  readonly setCategory: (category: Category) => void
-  readonly resetCategory: () => void
-  readonly setCategoryId: (categoryId: Category['id']) => void
 }
 
 /** The tab panels for the dashboard page. */
 export function DashboardTabPanels(props: DashboardTabPanelsProps) {
-  const {
-    appRunner,
-    initialProjectName,
-    ydocUrl,
-    assetManagementApiRef,
-    category,
-    setCategory,
-    resetCategory,
-    setCategoryId,
-  } = props
+  const { appRunner, initialProjectName, ydocUrl, assetManagementApiRef } = props
 
   const page = usePage()
 
@@ -64,10 +50,6 @@ export function DashboardTabPanels(props: DashboardTabPanelsProps) {
       children: (
         <Drive
           assetsManagementApiRef={assetManagementApiRef}
-          category={category}
-          setCategory={setCategory}
-          setCategoryId={setCategoryId}
-          resetCategory={resetCategory}
           hidden={page !== TabType.drive}
           initialProjectName={initialProjectName}
         />