Microsoft starts canceling Claude Code licenses

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FollowSee All MicrosoftMicrosoft starts canceling Claude Code licensesThousands of Microsoft developers will use GitHub Copilot CLI insteadThousands of Microsoft developers will use GitHub Copilot CLI insteadby Tom Warren Tom WarrenSenior CorrespondentPosts from this author will be added to your daily email digest and your homepage feed. FollowSee All by Tom WarrenMay 14, 2026, 7:00 PM UTC Image: Cath Virginia / The Verge Tom Warren Tom WarrenPosts from this author will be added to your daily email digest and your homepage feed. FollowSee All by Tom Warren is a senior correspondent and author of Notepad, who has been covering all things Microsoft, PC, and tech for over 20 years.

Technical Details

Microsoft first started opening up access to Claude Code in December, inviting thousands of its own developers to use Anthropic’s AI coding tool daily. It was part of an effort to get project managers, designers, and other employees to experiment with coding for the first time, and sources tell me that Claude Code has proved very popular inside Microsoft over the past six months. Perhaps a little too popular, as Microsoft is now preparing to walk back its Claude Code push.

I understand that Microsoft is planning to remove most of its Claude Code licenses and push many of its developers to use Copilot CLI instead. While Claude Code has been a popular addition, it has also undermined Microsoft’s new GitHub Copilot CLI coding tool — a command line version of GitHub Copilot that runs outside of development apps like Visual Studio Code. I’m told that Microsoft’s Experiences + Devices team, which includes the engineers responsible for Windows, Microsoft 365, Outlook, Microsoft Teams, and Surface, is winding down its usage of Claude Code by the end of June.

Sources tell me that engineers are being encouraged to start transitioning their workflows to GitHub Copilot CLI in the coming weeks, ahead of the cutoff. Microsoft is telling employees that the decision is about converging on Copilot CLI as its main agentic command line interface tool across Experiences + Devices, but sources tell me the decision is also a financial one. The June 30th cutoff is the last day of Microsoft’s current financial year, and canceling Claude Code licenses is an easy way to cut some operating expenses for when the new financial year starts in July.

“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,” says Rajesh Jha, executive vice president of Microsoft’s experiences and devices group, in an internal memo seen by Notepad.

This advance offers important signals about the future of the sector, and the tech world is watching closely.