Microsoft is discontinuing most Claude Code licenses, a move to transition developers to GitHub Copilot CLI, a tool seen as more aligned with Microsoft's strategic and financial goals. The shift comes after Claude Code gained popularity internally since its introduction in December.
Shift to GitHub Copilot CLI
Sources reveal Microsoft’s Experiences + Devices team plans to cease using Claude Code by June's end, directing engineers to embrace GitHub Copilot CLI. This transition aligns with the end of Microsoft's financial year on June 30, trimming operating costs.
Rajesh Jha, Executive Vice President of Microsoft’s experiences and devices group, stated in an internal memo, “When we began offering both Copilot CLI and Claude Code, our goal was to learn quickly and understand what best supported our teams. Claude Code was an important part of that learning.”
Financial and Strategic Considerations
While employees were initially encouraged to compare Claude Code and GitHub Copilot, Microsoft's developers favored Claude Code, creating a gap Copilot CLI aims to fill. Microsoft considered acquiring AI startup Cursor to enhance GitHub Copilot but is exploring other AI entities to avoid regulatory hurdles.
Jha noted, “The GitHub team has already shipped significant improvements based on Microsoft feedback, and Experiences + Devices will remain closely involved in shaping the product.”
Continuing Collaboration with Anthropic
Despite the phase-out, Microsoft will maintain its collaboration with Anthropic, whose AI models remain accessible through Copilot CLI. Microsoft has been a significant customer of Anthropic and recently signed a deal allowing access to Claude models via Microsoft Foundry.
Microsoft encourages developers to provide feedback on Copilot CLI as Claude Code is phased out, ensuring a smooth transition. The company’s commitment to integrating Anthropic's technology into Microsoft 365 apps remains unchanged.
As pressure mounts on Microsoft’s GitHub team to enhance Copilot CLI, the objective is to regain the favor of Microsoft's engineers and bolster its AI coding tool.
Source: https://www.theverge.com/tech/930447/microsoft-claude-code-discontinued-notepad
