Microsoft is reportedly cancelling most internal licenses for Anthropic's Claude Code AI coding tool as it begins shifting developers toward its own GitHub Copilot CLI platform. This move comes nearly five months after Microsoft first expanded access to Claude Code to thousands of employees, including engineers, project managers, and designers.
According to a report by The Verge, Claude Code quickly became popular among Microsoft employees and was widely used for coding, prototyping, and testing ideas. However, Microsoft is now moving to make Copilot CLI its primary AI coding tool across major teams, including Windows, Microsoft 365, Outlook, Teams, and Surface engineering groups.
Microsoft Plans Claude Code Cutoff by June End
According to internal discussions cited in the report, Microsoft's Experiences + Devices division plans to wind down usage of Claude Code by the end of June this year. Employees are reportedly being encouraged to move their workflows to GitHub Copilot CLI before the cutoff date.
The decision is said to be partly strategic and partly financial. June 30 marks the end of Microsoft's financial year, and reducing Claude Code licenses could help lower operating costs ahead of the new fiscal year starting in July.
Microsoft Says Focus Is Now on Copilot CLI
Microsoft VP Rajesh Jha explained the decision in an internal memo. “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,” Jha said.
“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 also said Microsoft and GitHub leadership now share responsibility for improving the platform. “This is a shared accountability across GitHub and E+D leadership: to make Copilot CLI the best agentic coding experience for Microsoft engineers,” he added.
Anthropic Partnership with Microsoft Will Continue
Despite the internal license cancellations, Microsoft's broader partnership with Anthropic remains active, as stated in the report. Anthropic's AI models will still be available through Copilot CLI, alongside models from OpenAI and Microsoft's own AI systems.
Microsoft also continues offering Anthropic models through its Foundry platform and uses Claude models inside some Microsoft 365 and Copilot features where they reportedly perform better for specific tasks.
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