Microsoft turns its back on Claude Code, asks employees to use Github Copilot instead: Report

Microsoft is telling its employees to stop using Claude Code and instead start moving towards its own GitHub Copilot CLI, according to a report by The Verge. Reportedly, Microsoft had first begun rolling out Claude Code to thousands of employees in December last year and invited not just coders but also thousands of other employees, including designers, project managers, and other non-technical staff, to experiment with coding.

The report notes that Anthropic’s AI coding assistant was so popular inside Microsoft that many of the company’s developers even began using it over Microsoft’s own coding assistant.

Microsoft tells employees to stop using Claude Code:

Microsoft has reportedly told its Experiences + Devices division, which includes teams working on Windows, Microsoft 365, and Outlook, to wind down the usage of Claude Code by the end of June and start transitioning to GitHub Copilot CLI in the coming weeks.

Notably, GitHub Copilot CLI is said to be a command-line version of GitHub Copilot that runs outside of development apps like Visual Studio Code.

The company is reportedly telling its employees that the decision to move away from Claude Code is part of the broader push to standardise Copilot CLI as its primary agentic command-line interface tool across the Experiences + Devices division.

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However, the report notes that the decision is also aimed at cutting costs. The tech giant has set 30 June as the cut-off day for Claude Code, which also coincides with the last day of Microsoft’s current financial year.

Reportedly, cancelling the Claude Code licences before the new financial year sets in could be an easy way to reduce operating expenses for the company.

In an internal memo seen by The Verge, Rajesh Jha, Executive Vice President of Microsoft’s Experiences and Devices group, said that the tech giant first started offering both Claude Code and Copilot to benchmark the tools in ‘real engineering workflows, and understand what best supported our teams’.

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“Claude Code was an important part of that learning… at the same time, Copilot CLI has given us something especially important: a product we can help shape directly with GitHub for Microsoft’s repos, workflows, security expectations, and engineering needs,” Jha added.

Why is Microsoft winding down use of Claude Code?

Reportedly, Microsoft’s own developers preferred Claude Code over GitHub Copilot, and there are said to be gaps between the two products that Microsoft will now have to address.

The Redmond, Washington-based company had also begun looking at Cursor as a potential acquisition in order to improve its product but is now said to be looking at different AI startups to avoid potential regulatory scrutiny.

Despite ending Claude Code subscriptions internally, Microsoft will continue to provide Anthropic’s models inside Copilot CLI, along with Microsoft’s internal AI models and OpenAI models.

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The company is also reportedly planning to invest more in Copilot CLI in order to integrate it better into Microsoft’s engineering workflows. Microsoft is also said to be encouraging developers to file bug reports and feedback on Copilot CLI before access to Claude Code gets revoked.

“The GitHub team has already shipped significant improvements based on Microsoft feedback, and Experiences + Devices will remain closely involved in shaping the product. This is a shared accountability across GitHub and E+D leadership: to make Copilot CLI the best agentic coding experience for Microsoft engineers,” Jha reportedly said in the memo.