The company had started offering access to Claude Code in December, which encouraged thousands of employees, including project managers and designers with little or no coding experience, to experiment with AI-assisted coding. Over the past six months, the tool has reportedly become widely popular inside Microsoft.
But Microsoft is now planning to remove most Claude Code licenses, particularly within its Experiences + Devices division, which includes teams working on Windows, Microsoft 365, Outlook, Teams and Surface, The Verge reported.
Sources cited in the report said the transition away from Claude Code is expected by the end of June, with engineers being encouraged to shift to GitHub Copilot CLI in the coming weeks.
Microsoft has internally described the move as an effort to standardize around Copilot CLI as its primary “agentic command line interface tool.”
But sources also told The Verge that cost-cutting is a factor as June 30 marks the end of Microsoft’s financial year.
“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,” Rajesh Jha, Executive Vice President of Microsoft’s Experiences and Devices group, said in an internal memo, as per the report.
Jha added that Copilot CLI gives Microsoft “a product we can help shape directly with GitHub for Microsoft’s repos, workflows, security expectations, and engineering needs.”
The report said Microsoft developers have increasingly preferred Claude Code over GitHub Copilot CLI in recent months.
Microsoft had reportedly explored acquiring AI coding startup Cursor to strengthen GitHub Copilot, but later shifted focus toward other AI startups amid concerns over potential regulatory scrutiny.
Despite the rollback, Anthropic’s AI models will continue to be available through Copilot CLI alongside OpenAI and Microsoft’s internal models. Microsoft also plans to further integrate Copilot CLI into its internal engineering workflows and is encouraging employees to submit bug reports and feedback before Claude Code access is phased out.
Microsoft remains closely tied to Anthropic through other partnerships. The company reportedly became one of Anthropic’s biggest customers earlier this year and signed a deal in November to offer Claude models through Microsoft Foundry.
The Verge report also noted that Microsoft still prefers Anthropic’s Claude models for certain tasks inside Microsoft 365 apps and Copilot because they outperform some OpenAI alternatives.
