Report: Microsoft “Winding Down” Claude Code Use Internally in Favor of GitHub Copilot CLI

Microsoft appears to be gearing up to change the way engineers within the company use its AI coding tools, with a new report hinting that Microsoft is reducing reliance on Anthropic’s Claude Code in the coming days. The news comes via Tom Warren, who, in his weekly Notepad report, mentions having seen an internal memo shared by Rajesh Jha, executive VP of Microsoft’s Experiences + Devices group.

In the memo, Jha notes, “When we began offering both Copilot CLI and Claude Code, our goal was to learn quickly, benchmark the tools in real engineering workflows, and understand what best supported our teams. 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.”

So why is Microsoft moving away from Claude Code? Back in December, when Microsoft initially made Claude Code available to thousands of developers as part of a campaign, it also meant to urge its employees working in different capacities, including engineers, designers, and product managers, to try out the new AI coding assistant. Given its solid capabilities, Claude Code soon became popular and was reportedly used at a much larger scale by engineers within Microsoft over the last few months.

It seems that push for Claude Code within the company may have undermined the new GitHub Copilot CLI. It could be one of the reasons behind Microsoft’s decision to roll back that decision. In fact, the report claims that Microsoft has started canceling all its licenses for Claude Code. As part of the change, Microsoft’s Experiences + Devices division is reportedly preparing to stop Claude Code usage by the end of June. Engineers are reportedly being encouraged to transition to Copilot CLI in the coming weeks ahead of the deadline.

Reportedly, Microsoft’s move is financially motivated, too. The deadline, June 30th, is the end of Microsoft’s financial year, which means canceling licenses could play a role cutting operational costs. Notably, Anthropic models will continue to be available through Copilot CLI, in addition to Microsoft internal models and OpenAI models. In a separate news, Microsoft is reportedly also planning AI startup acquisitions as it looks beyond OpenAI.