Microsoft Drops Claude Code in Favor of GitHub Copilot CLI

Microsoft has decided to end the use of Claude Code, an AI coding tool from Anthropic, within its teams. Introduced in December, Claude Code had been adopted by thousands of the company's developers to experiment with coding. Microsoft had encouraged employees with no coding experience to experiment with Claude Code, allowing designers and project managers to prototype ideas. However, Microsoft now plans to withdraw most of these licenses to promote the use of GitHub Copilot CLI, a command-line tool developed by GitHub.

This transition aims to make Copilot CLI the primary tool for developers in the Experiences + Devices team, which includes engineers working on Windows, Microsoft 365, Outlook, Microsoft Teams, and Surface. The deadline for this transition is set for June 30, coinciding with the end of Microsoft's financial year. This decision is driven by financial reasons, allowing the company to reduce its operational expenses.

Rajesh Jha, executive vice president of Microsoft's Experiences and Devices group, emphasized the importance of this transition in an internal memo. He stated that while Claude Code had been crucial for the teams' learning, Copilot CLI offers a product that Microsoft can directly shape with GitHub to meet its specific needs.

Microsoft engineers, who had become accustomed to using Claude Code, will now need to adapt to GitHub Copilot CLI. Microsoft has encouraged its employees to compare the two tools and provide feedback, but Claude Code had been preferred by many developers. To bridge the gaps between the two tools, Microsoft considered acquiring Cursor but is now exploring other AI startups.

Despite the discontinuation of Claude Code, Anthropic's models will remain accessible via Copilot CLI, along with other internal models and those from OpenAI. Microsoft plans to invest further in Copilot CLI to deeply integrate it into its engineering workflows. Developers are encouraged to report bugs and provide feedback on the tool.

Microsoft had previously signed an agreement with Anthropic in November to allow Microsoft Foundry customers access to Claude Sonnet 4.5, Claude Opus 4.1, and Claude Haiku 4.5. This agreement will not be affected by the cancellation of Claude Code licenses. Anthropic's Claude models continue to be used in Microsoft 365 and Copilot applications, where they sometimes outperform OpenAI's models. Additionally, Microsoft has closely collaborated with Anthropic to integrate the technology behind Claude Cowork into Microsoft 365 Copilot.

The pressure is now on the GitHub team to improve Copilot CLI and surpass the performance of Claude Code. Microsoft aims to reverse the trend and encourage its engineers to fully adopt its own AI coding tool.