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Microsoft starts canceling Claude Code licenses

493 points by robertkarl 5mo ago

https://archive.ph/WfCta https://archive.ph/WfCta

andyfilms1 5mo ago
Surely a company as large as Microsoft is actively attempting to build their own models. They couldn't possibly have expected to stake the future of their software development on the conditions of a third party company?
- rglover 5mo ago
  Curb Your Enthusiasm theme starts playing.
  - andrekandre 5mo ago
    i was thinking more arrested development but that works as well
- NitpickLawyer 5mo ago
  > attempting to build their own models. At one point there were rumours that they'd do that. They also have the rigts to oAI models for a few more years still, so they could always use that but apparently they're also compute starved (like anyone else).
  - kridsdale1 5mo ago
    MSFT does have a frontier AI Lab. My friend works there. I don’t know what they’re doing. But MSFT is one of like 5 entities that actually have the talent and physical infrastructure to compete in model-building.
- mrweasel 5mo ago
  Okay, but what if you're not Microsofts size and don't have and R&D budget large enough to fund development of your own models and tools? This is a warning to any company, not building their own AI, that AI assisted development could become really expensive really fast and most likely won't pay off. What Microsoft is suggesting is that the current price is to high, but it's still not high enough for e.g. Anthropic to be profitable, or AI coding tools are only as good as the developers using them. So you can't meaningfully do layoffs by replacing the developers with AIs, because the cost is to high. How does Microsoft plan to fix CoPilot, so that the cost will be so much lower than Claude, that budget overruns won't be a problem for their own customer?
  - andyfilms1 5mo ago
    I expect in the next year or so, we'll stop seeing headlines like "Anthropic buys $15b of compute from SpaceX" and we'll start seeing headlines like "Uber's AI department licenses GPT 6.2 as the foundation for their internal model," or something like that. Smaller companies will have departments that distill larger models into something more specifically manageable and useful for them. At least, that's my personal prediction :)
    - mrweasel 5mo ago
      How would that help with pricing? The cost of hardware is already subsidized to hell and back by investors and that's not dropping costs enough. I'm not concerned about Uber, they are way to big. I'm thinking sub 1000 employees in total and maybe 50 - 100 people in the IT department. Are they just going to be cut off from AI tools, because the cost of running them would ruin the company? I do think your prediction makes sense, because the AI really isn't the product, it needs to be baked into something and licensing the models saves you the R&D and cost of implementing your own.
    - jcgrillo 4mo ago
      > Smaller companies will have departments that distill larger models into something more specifically manageable and useful for them. In order to do that they'd have to make a concrete business case to justify the headcount and compute costs. They'd be facing the same fundamental economic problems Anthropic, OpenAI, MSFT, etc are facing just at a department level instead of a megacorp level. I hope they try it, sunlight is the best disinfectant. However, when the pressure is turned up and people have to actually show results--and, like, be accountable--instead of just buying a subscription and externalizing the accountability, I don't think we'll see so much enthusiasm about AI coding. Whether or not an engineer is actually more or less productive with AI (not merely whether they feel more productive) will begin to matter a lot more. I don't see how people continue using AI in this hypothetical small company under those adverse conditions.
  - kridsdale1 5mo ago
    Giving your workforce Claude is like giving everyone in the USPS a Ferrari. There may be a spot of “good enough to pay for and make a profit” that exists.
- onlyrealcuzzo 5mo ago
  MSFT and Apple are taking the same approach. The frontier model space costs 1000x as much to develop as the small language models, and is only 1.5 years ahead. Factually, the frontier models have not paid for themselves. So, if you're MSFT and Apple, you don't need to run in a race where even the winner loses massively. You can try to train models 1.5 years behind that are highly likely to be profitable, given your market position. The average person is lagging behind what AI is capable of by 3+ years anyway... So you can save 1000x on training and 10x on inference and just use SOTA small models. Why spend $5B training a model that's for sure not going to make $5B (after inference costs) when you can spend $5M building one that WILL make far more than that after inference costs?
tra3 5mo ago
There's definitely a way to use Claude code that is token conscious. I've tried throwing unsupervised agentic software factory workflows against the wall, and they burned through my tokens like nobody's business but didn't produce much. Supervised, human-in-the-loop process on the other hand is much more productive but doesn't consume nearly as much. Maybe that's why everyone's pushing agentic approaches so much.
- SubiculumCode 5mo ago
  At the enterprise level though, its going to be hard to want to use a service in which costs are not predictable, and keeping those costs under control requires employee training.
  - salawat 5mo ago
    There's no fucking training to mitigate a slot machine.
    - dgellow 5mo ago
      Games like Diablo are basically a whole bunch of slot machines, and there are strategies you can follow to optimize your run.
      - gambiting 5mo ago
        Yes, because in video games there is always a chance to win so you can optimize your strategy around that chance. If you have a 1% chance to drop a legendary weapon, the question becomes how do I manufacture 100 chances for a weapon drop in the shortest possible time. With agentic coding there is no such guaranteed chance - in a way it's worse than a slot machine that is guaranteed to pay out eventually. You could spend hundreds of millions of tokens and still not get what you asked for.
        echoangle 5mo ago
        > If you have a 1% chance to drop a legendary weapon, the question becomes how do I manufacture 100 chances for a weapon drop in the shortest possible time. Sidenote but I hope everyone realizes that 100 is kind of arbitrary here and does not mean the total chance to to get something is 100%.
robertkarl 5mo ago
Cancellation effective June 30. This was a _pilot_ launched in December that accidentally consumed their 2026 yearly target spend on AI! I expect the r/LocalLLaMA guys to be going nuts about this news.
- thewebguyd 5mo ago
  From the article > It was part of an effort to get project managers, designers, and other employees to experiment with coding for the first time. I suspect they weren't as efficient as they could be with token use either. Sounds like they were trying to encourage non-developers to vibe code stuff
  - xienze 5mo ago
    I'd argue you have a lot more to worry about with developers as far as token usage goes because they're the ones who know how to rig up these wild workflows where tens of agents simulate an entire software development team. The non-developers are probably going to be sticking more in the realm of iterating via chat.
    - deleted 5mo ago
      [deleted]
ndiddy 5mo ago
This is an AI generated summary of a blog post (https://www.thelowdownblog.com/2026/05/microsoft-cancels-internal-anthropic.html https://www.thelowdownblog.com/2026/05/microsoft-cancels-int...) which is a summary of an AI generated article (https://blazetrends.com/microsoft-cancels-claude-code-pilot-as-enterprise-ai-token-costs-explode/ https://blazetrends.com/microsoft-cancels-claude-code-pilot-...) which is a summary of another AI generated article (https://www.themodelwire.com/article/microsoft-starts-canceling-claude-code-licenses-01KRKY0B0H5956E2TP5MF8XHB0 https://www.themodelwire.com/article/microsoft-starts-cancel...) which is a summary of an article from The Verge (https://www.theverge.com/tech/930447/microsoft-claude-code-discontinued-notepad https://www.theverge.com/tech/930447/microsoft-claude-code-d...). I guess it would be better to link the Verge article instead.
- sashank_1509 5mo ago
  Welp, this is the future we live in now
- fishtoaster 5mo ago
  https://archive.is/WfCta https://archive.is/WfCta
- robertkarl 5mo ago
  My bad. I had trouble finding the original source when I googled for it and grabbed a link. I was originally shown a screenshot of a x.com post.
  - robertkarl 5mo ago
    I emailed dang to politely ask to make the link point to the Verge article since I can't update it.
- m132 5mo ago
  The absolute state of the Hacker News main page in 2026. Thank you for taking your time to put it all together.
- ajd555 5mo ago
killerstorm 5mo ago
The way coding agent work is fantastically wasteful. All the megabytes of code are processed over and over and over, sometimes withing just one session. There are papers describing KV cache precomputation for commonly used documents (e.g. KVLink), but, of course, it's not a priority for model providers: they'd rather sell you more tokens, also they would rather get to AGI/ASI first than optimize usage of existing models...
- brookst 5mo ago
  Claude code gets >98% KV cache hits. It’s not reprocessing unless you let the cache go cold (5 minutes, which is annoyingly short).
  - beoberha 5mo ago
    I believe OP is talking about new sessions or after compaction. He’s getting at the fact that LLMs are stateless and have to rediscover your codebase on every new session.
    - iainmerrick 5mo ago
      To be fair, on the Monday morning after a holiday, that’s exactly what I’m like too.
      - deleted 5mo ago
        [deleted]
  - killerstorm 5mo ago
    I meant caching on a bigger level. If you're an organization with 100 developers each doing 10 sessions a day, you're paying for 10000x tokens in frequently used document even if you had 100% KV cache hits within one session. Apparently that's too costly even for companies with trillion dollar market cap... Normally KV cache works only if your context prefix is identical, but there are papers which demonstrate documents can be cached between different contexts.
guluarte 5mo ago
I think tech companies are doing layoffs partly because they need to cover AI operating expenses.
- stock_toaster 5mo ago
  I think so too, otherwise why wouldn't you put that (purported) increased capacity/output into improving your existing products or creating new ones, with the headcount that you already have?
zkmon 5mo ago
My experience is, Claude Code burns way more tokens compared to other agents, probably to ensure high levels of perceived quality, which is, most of the times not worth the bloat for the user. The bloat works for Anthropic as an advertisement at the cost of your tokens.
- andrekandre 5mo ago
  its kind of weird tho, jensen also said we should be burning tons of tokens as well... 'perceived quality' cant be the only reason these ceos pushing token usage so hard can it?
  - verdverm 4mo ago
    reasons for token usage beyond expectations 1. right now, usage correlates with experimentation and learning, few if anyone knows how to make these things effective on their own over long sessions of activity 2. long term, you should be using more than one agent at a time, because they are running in the background based on events (new direct message / something happened in eg. github)
tyleo 5mo ago
Lots of these places measure employee token use with managers having dashboards. It seems like performative code production rather than making anything useful. Speed without judgement always compounds badly.
- andrewl-hn 5mo ago
  Tokens are current era' "lines of code per month" https://www.folklore.org/Negative_2000_Lines_Of_Code.html https://www.folklore.org/Negative_2000_Lines_Of_Code.html
thadk 5mo ago
Microsoft poorly manages token use of most expensive models in a pilot. Then they use that failure to advertise/position their own Github Copilot agents to procurement teams, over the now widely validated Claude Code-based agents. At least Codex is trying to win validation on merit.
uniclaude 5mo ago
That's very interesting to reconcile with the fact that not too far, Amazon employees feel incentivized to use as many tokens as possible.
- HDThoreaun 5mo ago
  "incentivize to use as many tokens as possible" = "Upper management knows people dont like change so we are forcing them to come up with ways to use this thing". It does not mean that management will encourage wastefulness in the future, and it also doesnt mean that token usage from now wont be reviewed in the future. Whats to stop them from dinging your performance in november because you wasted a hundred thousand on tokens with nothing to show for it?
  - boelboel 5mo ago
    Makes sense why Anthropic wants to IPO as soon as possible as the growth right now comes from temporary wastefulness. Makes all the investments more risky.
proxysna 5mo ago
Feels about right. I've launched an internal demo of Claude Code and Deepseek on the same day and we burned through our monthly allowance for Claude in just over a week, with more than a half of that budget being spent in one day. With DS people are unable to go through that same amount of money in a month, not even close. With that Claude feels like an expensive toy, while DS is a shovel, purely because developers do not feel like they are eating into a precious resource while using it. Also it does not feel like there is much of a difference in capability between Claude and DS-pro. DS-pro and flash do feel like sonnet/opus and haiku, but flash is still very-very capable.
- kridsdale1 5mo ago
  Considered Gemini?
  - operatingthetan 5mo ago
    Gemini got a big reduction in usage limits this week. There was backlash and they added 3x usage for Antigravity a day later but I haven't really tried it out to get a feel for it yet.
  - saulpw 5mo ago
    Google has burnt all of its goodwill in dev communities so no, I don't think Gemini is worth consideration.
  - seabrookmx 4mo ago
    Google rug pulled Code Assist and Gemini CLI. They're moving everything to Antigravity and we would need to reinstall all our tooling, reconfigure any automations, and the mechanism to subscribe via GCP is much clunkier. This was all supposed to be worked out prior to Cloud Next, but it wasn't. Ironically, they mentioned Claude in a few of their presentations at next. And that was our solution. We are a big GCP customer but our whole team is on Claude now and much happier.
- onlyrealcuzzo 5mo ago
  I rage canceled Claude today. After 2 weeks of Claude getting progressively worse and worse, today was the final straw. I don't care if they have a phone app. The model is COMPLETE garbage after you subscribe long enough and they think they've "got you". I can't code on my phone if the model literally moves in the wrong direction and does the opposite of what I tell it to. If I wanted to make my code worse, I'd just randomly commit garbage. I don't need a mobile app for that.
dsagent 5mo ago
I think whats funny is that employees were most likely already covering the cost for these tools because they are useful. Companies didn't believe employees were using these tools and now have forced their usage and no longer have the costs subsidized. Similarly companies seem to reward high token usage as a sign of someone willing to play ball with AI and again have forced higher costs on themselves for people reward hacking or using tokens out of spite.
- QuiEgo 5mo ago
  There is no world where I can put my company’s data through an external site without their express consent and security sign off. I suspect at most companies there’s zero path for people to have been paying for it themselves.
  - kridsdale1 5mo ago
    An enormous percentage of America’s white collar work force has been doing this since 2023. Fun fact, up until you face a consequence for crime, all crime is free! Have fun and go win the competition game against your co-workers.
    - cityofdelusion 5mo ago
      None of the 5 places I have worked is this possible, but they are also all highly regulated industries. Firewalls block virtually everything by default.
    - QuiEgo 5mo ago
      Fair, but I assume everything on my work laptop is key logged. Surely they would notice Claude phoning home from my company laptop? I suspect a network rule to look for that traffic is trivial?
      - RevEng 5mo ago
        My employer doesn't specifically block this stuff, but does put up a warning when you visit it to review our AI usage policy. There isn't detection for using things in ways we shouldn't, but they have an audit trail and can review it if there is suspicion.
o10449366 5mo ago
I switched from Anthropic to OpenAI after spending ~$40K in equivalent token costs using Claude over 3 months. I found Opus 4.7 to be slow and wasteful with token usage. It's shocking how inefficient it is with tasks like bash tool usage and web searching, delegating them to a dozen subagents only to get stuck and never return until you esc and intervene. That, in addition to all of the broken tooling Anthropic built in to limit token usage like the broken monitoring tool made managing Claude a chore. I was happy to pay $200/month for Opus 4.5 when they had more capacity, but 4.7 felt like a huge step back and no longer worth the price and inconvenience. I remember an OpenAI employee comment on the GPT5.5 release post about how they specifically geared it towards long-horizon tasks and its been a breathe of fresh air in that regard. I have five two-week long sessions going right now and there's been no degradation in performance or efficiency. It's much better at carrying rules/learnings forward even in long-running sessions and grounding/refreshing itself in verified facts when it loses context. Its funny because in two weeks I've gotten way more done with GPT5.5 with way fewer tokens and way less handholding. I think this goes to show how important tooling and the harness is and how a capable model like Opus 4.7 can be severely handicapped by bad product decisions.
- gnat 5mo ago
  Being able to mange context over long running sessions is a function of the harness, not the model. Are you using Claude Code with GPT5.5? Codex? piclaw? They’ll all have different context management strategies to let you keep going when you would otherwise have filled up context and be forced to stop.
  - beering 4mo ago
    It doesn’t matter how good the harness is if the model does a bad job of planning and continuing from long context. A good harness cannot overcome a weak model.
josefritzishere 5mo ago
AI slop ruined a story about AI? This thread is a story about itself.
rnxrx 5mo ago
Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?
- ares623 5mo ago
  There is no profit, expense, revenue. Those don't matter. Only thing that matters is stock price goes up, and laying off makes stock price go up. When laying off make stock price go down, then laying off stop.
  - stock_toaster 5mo ago
    I imagine layoffs are also very much "this quarter and next quarter" with regards to investor visibility. While LLM Opex is "some future quarter" and very easy to co-mingle with other expenses.
- thewebguyd 5mo ago
  I suspect AI would have to get drastically more expensive before it starts looking worse than payroll. If one developer using Claude Code can effectively substitute for 2 developers, you are already coming out ahead at current API pricing assuming very heavy usage, your cost is going to be ~1.5x developer (factoring in beyond salary - benefits, PTO, the other overhead that comes with having employees). So you're getting 2 for the price of 1.5. Scale that up to 500 devs at a big company and it's a big chunk of change saved on payroll. Keeping your headcount or hiring humans instead, AI would have to start to cost upwards of $15k/month/developer or more before it costs more than hiring. You're looking at about 4 billion tokens per month before humans start to break even or are cheaper.
  - jayd16 5mo ago
    You're starting from the assumption that its a 2x benefit. That's a massive leap.
skeledrew 5mo ago
Well, that's the inevitable outcome of token-maxxing :shrugs:
wg0 5mo ago
Microsoft should host DeepseekV4 internally for its developers. And you're welcome.
- rvz 5mo ago
  This is the smartest solution to do, to self host the model locally on premise.
  - kridsdale1 5mo ago
    And by that, you mean, in Azure, surely.
- chris_money202 4mo ago
  Microsoft does self host claude and gpt for GHCP
othmarodev 5mo ago
[flagged]
sergiomattei 5mo ago
My impression is they're being cancelled in favor of full internal adoption of Copilot CLI, which has got much better over the past few months.
- Shalomboy 5mo ago
  I'm also a big fan of Copilot CLI, especially after demoing it to a coworker who liked Claude Code.
andrewl-hn 5mo ago
I'm surprised they even had them in a first place. Doesn't Microsoft have a deep partnership with OpenAI? Aren't all Copilot things powered by various GPT models? I would assume the two companies have barter agreements of sorts.
- RevEng 5mo ago
  They do have agreements, but they aren't exclusive, and Microsoft and Open AI have had a rather public falling out over the last year.
relevant_stats 5mo ago
So, snippet from the article says the following: > 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. And people here are interpreting this as related mainly to the Claude burning too much tokens too quickly and suggesting Microsoft should rather use SomeOtherLLM©? Is this Hacker News or rather Marketing Wars?
- RobRivera 5mo ago
  Por que no los dos? Eso mensaje de hijo de Carlos
  - relevant_stats 5mo ago
    Äh, was?
- johnnypangs 5mo ago
  I don’t think people read the article, I didn’t until I saw your comment. The article feels like clickbait tbh.
- s_dev 5mo ago
  So "Microsoft chooses to eat its own dogfood" is a more accurate title?
- ninjagoo 4mo ago
  > Is this Hacker News or rather Marketing Wars? No public forum is naturally immune to the spread of (guerilla) marketing. [1] [1] Internet Rule #48
- righthand 4mo ago
  It's a forum called Hacker News that's been hacked and covertly refactored into Marketing Wars. Being their primary goal is to foster a space to draw-in (marketing) projects/start-ups.
wolvoleo 5mo ago
What's the point of eating your own dog food when the only thing you are doing is reselling other people's dog food? Microsoft don't have any competing LLM.
jasondillingham 5mo ago
[flagged]
DeathArrow 5mo ago
Doesn't MS have the compute to run GPT 5.5 for all its employees?
nobodywillobsrv 5mo ago
This feels like these kind of bad incentive problems we always here about on here ... Like bugs and vipers.
gmerc 5mo ago
They got DeepSeek on Azure, would cut costs by 10x … if they ran it on Huawei
matt3210 5mo ago
Tokens aren’t that much of an issue when your not evaluated on the usage
sreekanth850 5mo ago
If you properly keep documents, architecture, and decision records, token consumption can be pretty less. Iam managing everything with two codex plus sub. Repo size is 300 k loc ( backend).
iamflimflam1 5mo ago
From reading the article. They offered their developers both Claude code and Copilot. What they wanted was for them to use both and feedback which was better. The developers voted with their feet and didn’t use Copilot. What Microsoft were hoping was that the opposite would happen...
- cfunderburg 5mo ago
  I wish I could understand the appeal of using Claude Code inside VScode rather than Copilot. I feel like I'm missing something obvious.
  - stanac 5mo ago
    I think they were comparing CLIs, not VS extensions.
  - darig 5mo ago
    [dead]
  - rplnt 5mo ago
    Slightly related (me not understanding) is why the Copilot in VS code is essentially just CLI interface. Why can't it use the IDE tools (search, LSP, ...). All it ever does is trying to execute grep.
    - skywhopper 5mo ago
      Because it’s far far easier to make a text-generation machine generate text that has decades of how-to explanations on the Internet than to correctly work an internal editor API that changes often and isn’t as well-documented. Especially if you want effective results.
      - avadodin 4mo ago
        Claude Copilot does seem a bit more lost on the interface side than other models, but then again all of them are. Only the baseline tier seems to have been fine tuned to the platform.
keyle 5mo ago
The title is somewhat bait. It reads like MSFT is using less AI, while in fact it's just a force swap to Copilot. Arguably, Copilot is GPT 5? Not sure what the CLI offers behind the covers.
- patentlyze 5mo ago
  I disagree. As someone who just got a new Windows laptop with Copilot baked(forced) in I've tested Copilot a lot. It. is. so. bad. It feels like it's at least 1-2 years behind the current top models.
  - gbro3n 5mo ago
    But there isn't a copilot model is there? Just a harnesse, and the vscode copilot extension is pretty good (haven't tried the tui)
  - tored 5mo ago
    Copilot is not the same agent as GitHub Copilot.
  - keyle 4mo ago
    Your Copilot free offering isn't the Copilot they're using within the company for coding assistant. It's confusing I know.
  - alternatex 4mo ago
    Copilot cannot be behind any models because it's a harness, not a model. You can use any of the popular models through it, including Claude models. Though people have been saying that Claude CLI is a better experience.
- meowkit 5mo ago
  Copilot is the name for the harness / wrapper of MSFT products The CLI can swap to whatever model (/models) based on your subscriptions. The copilots on desktop or Office Apps are likely just GPT5 nano or other tiny models with cheap inference
- 5mo ago
usernametaken29 5mo ago
I switched to OpenRouter and OpenCode a while ago. It is much cheaper, much much cheaper, and A LOT more reliable. Particulary Gemini was a piece of trash when it came to uptime
zabil 5mo ago
I switched from Claude code to the GitHub copilot app recently. Since our repositories are hosted on GitHub I find the copilot app better integrated for the PR workflow with PR management available in the app. I don’t think I miss any of the features of Claude code I never thought I would make the switch but copilot upped the game. Also it became very hard to convince management to keep both Claude code and GitHub Copilot enterprise licenses.
mstralman 5mo ago
[flagged]
cbdevidal 5mo ago
I’ve been quite content with CoPilot’s $10/mo plan. Still offers access to Claude models (limited tokens) but has no time limits like the $20 Claude plan, so no interruptions in work flow. I use one of the free models for the more pedestrian tasks then sic Claude on the particularly thorny problems. Works very well for me.
- cbdevidal 5mo ago
  Can even buy more premium tokens for more Claude use, which I have done once. But most of the time the tokens included in the plan are sufficient.
- mellosouls 5mo ago
  I'm not sure if you are referring to the old or new plan? Github Copilot offered probably the best value and was IMO underappreciated for a long time; I've been an annual subscriber since day 1. The changes announced a few days ago completely revoke that value proposition, I doubt I'll continue with it.
  - cbdevidal 5mo ago
    There’s a new plan? Ugh. I signed up about five months ago.
    - mellosouls 5mo ago
      Yes, unfortunately. eg. discussions below - I think I have seen multipliers of 9x cost to existing use cases: Changes to GitHub Copilot individual plans https://news.ycombinator.com/item?id=47838508 https://news.ycombinator.com/item?id=47838508 GitHub Copilot is moving to usage-based billing https://news.ycombinator.com/item?id=47923357 https://news.ycombinator.com/item?id=47923357 Multipliers for annual subscribers: https://docs.github.com/en/copilot/reference/copilot-billing/model-multipliers-for-annual-plans https://docs.github.com/en/copilot/reference/copilot-billing...
      - cbdevidal 4mo ago
dminik 5mo ago
To be fair, Microsoft dogfooding something for once would be great.
maxignol 4mo ago
This might actually be clever since Microsoft dev will be longing claude code features and might result in copilot getting way better
- ryanhecht 4mo ago
  That's what we've spent the last five months doing! Have you tried the Copilot CLI recently? We've onboarded loads of feedback from Microsoft devs who were switching from Claude Code -- I'm proud of how far the team has come! This announcement comes at a time where Copilot CLI usage has been greater than Claude Code usage at Microsoft for several weeks; we've been winning hearts and minds!
wilt6269 4mo ago
[dead]
harimau777 4mo ago
The comments I see recommending selective use of cheaper models doesn't match the reality I experience working in the industry. I have the constant threat hanging over my head of being fired if I don't churn out code quickly enough. I'm not willing to gamble with my livelyhood by using a less effective model. Saving money on tokens isn't something that's rewarded during performance reviews; particularly because it's difficult to quantify how much you saved versus hypothetically using a more expensive model.
- cowsandmilk 4mo ago
  This, if you’re high performing, the company won’t question your use of tokens. If they want to limit it, they have ways to set limits on spend and usage.
- krzyk 4mo ago
  If you have such toxic environment, run.
  - mschuster91 4mo ago
    Where to, that's the question. The economy is in the gutters and the replace-people-with-AI craze is making the issue even worse.
    - ponector 4mo ago
      And open positions are simply because someone decided to run from that place
    - ggititel 4mo ago
      Perhaps for now. But you know, after working solid with AI for two years and adopting effective methods using detailed plans, and having a lot of success with it, here is the problem: Coding faster leads to less understanding and higher long-term risk. Source-Code amnesia is real, and there’s a time requirement to really understand and appreciate what a system is actually doing. I’ve been able to implement very large features using frontier models, but the code needs to always be revisited. AI can do two things: find vulnerabilities, and prototype code. It cannot design software, and any appearance of such is an illusion at best. We don’t need to produce faster to be successful, we need to create better, long lasting products.
jgalt212 4mo ago
What per cent of internal Microsoft IP runs through Anthropic? Do they not care about trade secrets, or certain groups allowed or not allowed to use tools that expose IP to external vendors?
heisenbit 4mo ago
How would one call such a strategy? Embrace and extend comes to mind.
- lou1306 4mo ago
  This has really little to do with embrace and extend. They are not taking over an open standard or anything like that. If anything, it's forced dogfooding, i.e., forcing their own workforce to beta-test their product.
plaidfuji 4mo ago
Our shop is forced to use Copilot on gov cloud, and it’s so useless I usually stick to manually coding. Its syntax is messy, it randomly combines lines together, flips order, or drops a couple tokens worth of output in the middle of a line, and for some reason it consistently drops the last line of every code block. I assume we’re getting a few versions back of GPT under the hood. But it does make me appreciate how the models of the past year or so crossed the threshold from interesting to truly productivity-enhancing. Between Copilot, Claude, and Gemini, I still actually prefer Gemini. I do a lot of scientific writing in addition to coding and Gemini is the only model I can trust to “just be right”. This trust then transfers over to its code output.
- totalhack 4mo ago
  If you are talking about the Copilot built into vs code, that's not been my recent experience at all. Very capable in agent mode since gpt 5.4 came out.
  - siva7 4mo ago
    Especially since gpt 5.5 it's on par with Opus 4.7 or Sonnet.
la64710 4mo ago
It seems that people are using LLMs to generate code but many complain of sub par code. I recall the early days of virtualization when folks will use it but complain about performance. HW capacity continued to improve until virtualization became de facto standard. I wonder if sub par code will become better as more powerful agents models or compute become available.
goldylochness 4mo ago
after having used claude for quite some time, i would buy puts on microsoft
loloquwowndueo 4mo ago
Reminds me of when Steve Ballmer forbade his children to use iPods and pushed towards the Zune instead. Hahaha
- bel8 4mo ago
  1) They can still use Anthropic models. 2) Opus is not even unambiguously best at coding anymore. GPT 5.5 splits that title for some time now. 3) I would have probably done the same in his position. Dogfood the product.
  - loloquwowndueo 4mo ago
    Dogfooding only works if it actually helps improve the product. zune never improved. Dogfooding without improving is just eating dog food for no good reason.
    - bel8 4mo ago
      Sure success is not guaranteed. But dogfooding helps. Should Microsoft have stopped dogfooding because of Zune? They are worth multiples of trillion dollars so I would wager they know a little more about success than you and me.
      - loloquwowndueo 4mo ago
        > They are worth multiples of trillion dollars so I would wager they know a little more about success than you and me. Hahahaha. Are you saying that if we did what they do we’d be successful? Because I’m perfectly happy to be where I am if it means I’m nothing, nothing at all like Microsoft.
        bel8 4mo ago
        I'd keep the conversation to dogfooding and how it helped Microsoft achieve unique status, but you do you.
jadar 4mo ago
It's been said that technologies are not product. CC might be better, but at the end of the day M$ is going to want to cut costs and have employees use their own technology. Perhaps Copilot CLI is close enough, and the CC product doesn't justify the cost of the Claude (technology) license when M$ has their own technology to leverage. Side note, it's so frustrating that The Verge puts a paywall at the fold. It makes me feel like the rest of the story is not worth reading. I'm not inclined to pay $2 to read a link that was posted on an aggregator.
thisislife2 4mo ago
More here: Microsoft reports are exposing AI's real cost problem: Using the tech is more expensive than paying human employees - https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tokens-agents/ https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tok...
Kapura 4mo ago
"everybody needs to use these new AI tools or you will be left behind. no! not like that! the cheap, worser ones!"
geoffbp 4mo ago
How efficient is Claude at cleaning up unused code and making things more simple - as good as it is at adding code / features?
gradientsrneat 4mo ago
Related: Microsoft-owned GitHub recently switched to token-based billing: https://github.blog/news-insights/company-news/github-copilot-is-moving-to-usage-based-billing/ https://github.blog/news-insights/company-news/github-copilo... Claude tokens are priced by GitHub at a disproportionately premium price compared to Gemini and OpenAI. I wonder why? https://docs.github.com/en/copilot/reference/copilot-billing/model-multipliers-for-annual-plans https://docs.github.com/en/copilot/reference/copilot-billing...
fredcallagan 4mo ago
I have noticed particularly in recent weeks and maybe couple of months that token costs are just ridiculous. I can understand the upcoming IPOs and instinctive pressure to show profits ... but let's be honest, showcasing burning 1.3 million USD in tokens by a single developer in a month is the most ridiculous thing I have seen in my entire life. The general principles still apply. You expect investing X and have a return on such investment. Unfortunately that's not so easy to promise or expect. There's no real 1 to 1 correlation between amount of code written and returns, and even less between tokens burned and returns. I start to believe that the current token pricing approach, followed at the moment by all leading labs (especially considering OS models capabilities), is bordeline delusional ...
visualphoenix 4mo ago
Good luck to them! I recently had the misfortune of fighting Copilot on a Github PR and it made me want to never contribute to the project again.
Akamant 4mo ago
It seems like new Holy Wars will rage between those who can afford models like the Opus 4.7 or GPT 5.5 Pro, which in my opinion are unlikely to have been used for anything serious, as they're simply several times more expensive than any human effort. There's a speed advantage (still questionable), and quality isn't guaranteed, but the price completely kills everything. And between those who actually write the code and calculate the development costs. I won't talk about large corporations that can afford it, much less those who develop models. "Mere mortals" simply don't have such opportunities. 17 GoLang microservices for a serious project were written perfectly using the latest version of QWEN. The only areas where we really had to work hard were documentation and a very serious task breakdown. All of this was tested, and yes, a review was required, but everything was within reason. The deadline was 10 days of 24/7 work, including the review. When attempting to submit the same task, Opus 4.7/4.6 had to be stopped after three hours. If you have significant resources for experimentation, you can certainly try. For us, the choice is absolutely clear at this point.
- pratikel 4mo ago
  I’m curious to learn of your problem where you needed 17 Golang microservices (assuming these are newly created).
talatidv 4mo ago
[flagged]

493 points by robertkarl 5mo ago

https://archive.ph/WfCta https://archive.ph/WfCta

Surely a company as large as Microsoft is actively attempting to build their own models. They couldn't possibly have expected to stake the future of their software development on the conditions of a third party company?

rglover 5mo ago
Curb Your Enthusiasm theme starts playing.
- andrekandre 5mo ago
  i was thinking more arrested development but that works as well
NitpickLawyer 5mo ago
> attempting to build their own models. At one point there were rumours that they'd do that. They also have the rigts to oAI models for a few more years still, so they could always use that but apparently they're also compute starved (like anyone else).
- kridsdale1 5mo ago
  MSFT does have a frontier AI Lab. My friend works there. I don’t know what they’re doing. But MSFT is one of like 5 entities that actually have the talent and physical infrastructure to compete in model-building.
mrweasel 5mo ago
Okay, but what if you're not Microsofts size and don't have and R&D budget large enough to fund development of your own models and tools? This is a warning to any company, not building their own AI, that AI assisted development could become really expensive really fast and most likely won't pay off. What Microsoft is suggesting is that the current price is to high, but it's still not high enough for e.g. Anthropic to be profitable, or AI coding tools are only as good as the developers using them. So you can't meaningfully do layoffs by replacing the developers with AIs, because the cost is to high. How does Microsoft plan to fix CoPilot, so that the cost will be so much lower than Claude, that budget overruns won't be a problem for their own customer?
- andyfilms1 5mo ago
  I expect in the next year or so, we'll stop seeing headlines like "Anthropic buys $15b of compute from SpaceX" and we'll start seeing headlines like "Uber's AI department licenses GPT 6.2 as the foundation for their internal model," or something like that. Smaller companies will have departments that distill larger models into something more specifically manageable and useful for them. At least, that's my personal prediction :)
  - mrweasel 5mo ago
    How would that help with pricing? The cost of hardware is already subsidized to hell and back by investors and that's not dropping costs enough. I'm not concerned about Uber, they are way to big. I'm thinking sub 1000 employees in total and maybe 50 - 100 people in the IT department. Are they just going to be cut off from AI tools, because the cost of running them would ruin the company? I do think your prediction makes sense, because the AI really isn't the product, it needs to be baked into something and licensing the models saves you the R&D and cost of implementing your own.
  - jcgrillo 4mo ago
    > Smaller companies will have departments that distill larger models into something more specifically manageable and useful for them. In order to do that they'd have to make a concrete business case to justify the headcount and compute costs. They'd be facing the same fundamental economic problems Anthropic, OpenAI, MSFT, etc are facing just at a department level instead of a megacorp level. I hope they try it, sunlight is the best disinfectant. However, when the pressure is turned up and people have to actually show results--and, like, be accountable--instead of just buying a subscription and externalizing the accountability, I don't think we'll see so much enthusiasm about AI coding. Whether or not an engineer is actually more or less productive with AI (not merely whether they feel more productive) will begin to matter a lot more. I don't see how people continue using AI in this hypothetical small company under those adverse conditions.
- kridsdale1 5mo ago
  Giving your workforce Claude is like giving everyone in the USPS a Ferrari. There may be a spot of “good enough to pay for and make a profit” that exists.
onlyrealcuzzo 5mo ago
MSFT and Apple are taking the same approach. The frontier model space costs 1000x as much to develop as the small language models, and is only 1.5 years ahead. Factually, the frontier models have not paid for themselves. So, if you're MSFT and Apple, you don't need to run in a race where even the winner loses massively. You can try to train models 1.5 years behind that are highly likely to be profitable, given your market position. The average person is lagging behind what AI is capable of by 3+ years anyway... So you can save 1000x on training and 10x on inference and just use SOTA small models. Why spend $5B training a model that's for sure not going to make $5B (after inference costs) when you can spend $5M building one that WILL make far more than that after inference costs?

tra3 5mo ago

There's definitely a way to use Claude code that is token conscious. I've tried throwing unsupervised agentic software factory workflows against the wall, and they burned through my tokens like nobody's business but didn't produce much. Supervised, human-in-the-loop process on the other hand is much more productive but doesn't consume nearly as much. Maybe that's why everyone's pushing agentic approaches so much.

SubiculumCode 5mo ago
At the enterprise level though, its going to be hard to want to use a service in which costs are not predictable, and keeping those costs under control requires employee training.
- salawat 5mo ago
  There's no fucking training to mitigate a slot machine.
  - dgellow 5mo ago
    Games like Diablo are basically a whole bunch of slot machines, and there are strategies you can follow to optimize your run.
    - gambiting 5mo ago
      Yes, because in video games there is always a chance to win so you can optimize your strategy around that chance. If you have a 1% chance to drop a legendary weapon, the question becomes how do I manufacture 100 chances for a weapon drop in the shortest possible time. With agentic coding there is no such guaranteed chance - in a way it's worse than a slot machine that is guaranteed to pay out eventually. You could spend hundreds of millions of tokens and still not get what you asked for.
      - echoangle 5mo ago
        > If you have a 1% chance to drop a legendary weapon, the question becomes how do I manufacture 100 chances for a weapon drop in the shortest possible time. Sidenote but I hope everyone realizes that 100 is kind of arbitrary here and does not mean the total chance to to get something is 100%.

robertkarl 5mo ago

Cancellation effective June 30. This was a _pilot_ launched in December that accidentally consumed their 2026 yearly target spend on AI! I expect the r/LocalLLaMA guys to be going nuts about this news.

thewebguyd 5mo ago
From the article > It was part of an effort to get project managers, designers, and other employees to experiment with coding for the first time. I suspect they weren't as efficient as they could be with token use either. Sounds like they were trying to encourage non-developers to vibe code stuff
- xienze 5mo ago
  I'd argue you have a lot more to worry about with developers as far as token usage goes because they're the ones who know how to rig up these wild workflows where tens of agents simulate an entire software development team. The non-developers are probably going to be sticking more in the realm of iterating via chat.
  - deleted 5mo ago
    [deleted]

ndiddy 5mo ago

This is an AI generated summary of a blog post (https://www.thelowdownblog.com/2026/05/microsoft-cancels-internal-anthropic.html https://www.thelowdownblog.com/2026/05/microsoft-cancels-int...) which is a summary of an AI generated article (https://blazetrends.com/microsoft-cancels-claude-code-pilot-as-enterprise-ai-token-costs-explode/ https://blazetrends.com/microsoft-cancels-claude-code-pilot-...) which is a summary of another AI generated article (https://www.themodelwire.com/article/microsoft-starts-canceling-claude-code-licenses-01KRKY0B0H5956E2TP5MF8XHB0 https://www.themodelwire.com/article/microsoft-starts-cancel...) which is a summary of an article from The Verge (https://www.theverge.com/tech/930447/microsoft-claude-code-discontinued-notepad https://www.theverge.com/tech/930447/microsoft-claude-code-d...). I guess it would be better to link the Verge article instead.

sashank_1509 5mo ago
Welp, this is the future we live in now
fishtoaster 5mo ago
https://archive.is/WfCta https://archive.is/WfCta
robertkarl 5mo ago
My bad. I had trouble finding the original source when I googled for it and grabbed a link. I was originally shown a screenshot of a x.com post.
- robertkarl 5mo ago
  I emailed dang to politely ask to make the link point to the Verge article since I can't update it.
m132 5mo ago
The absolute state of the Hacker News main page in 2026. Thank you for taking your time to put it all together.
ajd555 5mo ago

killerstorm 5mo ago

The way coding agent work is fantastically wasteful. All the megabytes of code are processed over and over and over, sometimes withing just one session. There are papers describing KV cache precomputation for commonly used documents (e.g. KVLink), but, of course, it's not a priority for model providers: they'd rather sell you more tokens, also they would rather get to AGI/ASI first than optimize usage of existing models...

brookst 5mo ago
Claude code gets >98% KV cache hits. It’s not reprocessing unless you let the cache go cold (5 minutes, which is annoyingly short).
- beoberha 5mo ago
  I believe OP is talking about new sessions or after compaction. He’s getting at the fact that LLMs are stateless and have to rediscover your codebase on every new session.
  - iainmerrick 5mo ago
    To be fair, on the Monday morning after a holiday, that’s exactly what I’m like too.
    - deleted 5mo ago
      [deleted]
- killerstorm 5mo ago
  I meant caching on a bigger level. If you're an organization with 100 developers each doing 10 sessions a day, you're paying for 10000x tokens in frequently used document even if you had 100% KV cache hits within one session. Apparently that's too costly even for companies with trillion dollar market cap... Normally KV cache works only if your context prefix is identical, but there are papers which demonstrate documents can be cached between different contexts.

guluarte 5mo ago

I think tech companies are doing layoffs partly because they need to cover AI operating expenses.

stock_toaster 5mo ago
I think so too, otherwise why wouldn't you put that (purported) increased capacity/output into improving your existing products or creating new ones, with the headcount that you already have?

zkmon 5mo ago

My experience is, Claude Code burns way more tokens compared to other agents, probably to ensure high levels of perceived quality, which is, most of the times not worth the bloat for the user. The bloat works for Anthropic as an advertisement at the cost of your tokens.

andrekandre 5mo ago
its kind of weird tho, jensen also said we should be burning tons of tokens as well... 'perceived quality' cant be the only reason these ceos pushing token usage so hard can it?
- verdverm 4mo ago
  reasons for token usage beyond expectations 1. right now, usage correlates with experimentation and learning, few if anyone knows how to make these things effective on their own over long sessions of activity 2. long term, you should be using more than one agent at a time, because they are running in the background based on events (new direct message / something happened in eg. github)

tyleo 5mo ago

Lots of these places measure employee token use with managers having dashboards. It seems like performative code production rather than making anything useful. Speed without judgement always compounds badly.

andrewl-hn 5mo ago
Tokens are current era' "lines of code per month" https://www.folklore.org/Negative_2000_Lines_Of_Code.html https://www.folklore.org/Negative_2000_Lines_Of_Code.html

thadk 5mo ago

Microsoft poorly manages token use of most expensive models in a pilot. Then they use that failure to advertise/position their own Github Copilot agents to procurement teams, over the now widely validated Claude Code-based agents. At least Codex is trying to win validation on merit.

uniclaude 5mo ago

That's very interesting to reconcile with the fact that not too far, Amazon employees feel incentivized to use as many tokens as possible.

HDThoreaun 5mo ago
"incentivize to use as many tokens as possible" = "Upper management knows people dont like change so we are forcing them to come up with ways to use this thing". It does not mean that management will encourage wastefulness in the future, and it also doesnt mean that token usage from now wont be reviewed in the future. Whats to stop them from dinging your performance in november because you wasted a hundred thousand on tokens with nothing to show for it?
- boelboel 5mo ago
  Makes sense why Anthropic wants to IPO as soon as possible as the growth right now comes from temporary wastefulness. Makes all the investments more risky.

proxysna 5mo ago

Feels about right. I've launched an internal demo of Claude Code and Deepseek on the same day and we burned through our monthly allowance for Claude in just over a week, with more than a half of that budget being spent in one day. With DS people are unable to go through that same amount of money in a month, not even close. With that Claude feels like an expensive toy, while DS is a shovel, purely because developers do not feel like they are eating into a precious resource while using it. Also it does not feel like there is much of a difference in capability between Claude and DS-pro. DS-pro and flash do feel like sonnet/opus and haiku, but flash is still very-very capable.

kridsdale1 5mo ago
Considered Gemini?
- operatingthetan 5mo ago
  Gemini got a big reduction in usage limits this week. There was backlash and they added 3x usage for Antigravity a day later but I haven't really tried it out to get a feel for it yet.
- saulpw 5mo ago
  Google has burnt all of its goodwill in dev communities so no, I don't think Gemini is worth consideration.
- seabrookmx 4mo ago
  Google rug pulled Code Assist and Gemini CLI. They're moving everything to Antigravity and we would need to reinstall all our tooling, reconfigure any automations, and the mechanism to subscribe via GCP is much clunkier. This was all supposed to be worked out prior to Cloud Next, but it wasn't. Ironically, they mentioned Claude in a few of their presentations at next. And that was our solution. We are a big GCP customer but our whole team is on Claude now and much happier.
onlyrealcuzzo 5mo ago
I rage canceled Claude today. After 2 weeks of Claude getting progressively worse and worse, today was the final straw. I don't care if they have a phone app. The model is COMPLETE garbage after you subscribe long enough and they think they've "got you". I can't code on my phone if the model literally moves in the wrong direction and does the opposite of what I tell it to. If I wanted to make my code worse, I'd just randomly commit garbage. I don't need a mobile app for that.

dsagent 5mo ago

I think whats funny is that employees were most likely already covering the cost for these tools because they are useful. Companies didn't believe employees were using these tools and now have forced their usage and no longer have the costs subsidized. Similarly companies seem to reward high token usage as a sign of someone willing to play ball with AI and again have forced higher costs on themselves for people reward hacking or using tokens out of spite.

QuiEgo 5mo ago
There is no world where I can put my company’s data through an external site without their express consent and security sign off. I suspect at most companies there’s zero path for people to have been paying for it themselves.
- kridsdale1 5mo ago
  An enormous percentage of America’s white collar work force has been doing this since 2023. Fun fact, up until you face a consequence for crime, all crime is free! Have fun and go win the competition game against your co-workers.
  - cityofdelusion 5mo ago
    None of the 5 places I have worked is this possible, but they are also all highly regulated industries. Firewalls block virtually everything by default.
  - QuiEgo 5mo ago
    Fair, but I assume everything on my work laptop is key logged. Surely they would notice Claude phoning home from my company laptop? I suspect a network rule to look for that traffic is trivial?
    - RevEng 5mo ago
      My employer doesn't specifically block this stuff, but does put up a warning when you visit it to review our AI usage policy. There isn't detection for using things in ways we shouldn't, but they have an audit trail and can review it if there is suspicion.

o10449366 5mo ago

I switched from Anthropic to OpenAI after spending ~$40K in equivalent token costs using Claude over 3 months. I found Opus 4.7 to be slow and wasteful with token usage. It's shocking how inefficient it is with tasks like bash tool usage and web searching, delegating them to a dozen subagents only to get stuck and never return until you esc and intervene. That, in addition to all of the broken tooling Anthropic built in to limit token usage like the broken monitoring tool made managing Claude a chore. I was happy to pay $200/month for Opus 4.5 when they had more capacity, but 4.7 felt like a huge step back and no longer worth the price and inconvenience. I remember an OpenAI employee comment on the GPT5.5 release post about how they specifically geared it towards long-horizon tasks and its been a breathe of fresh air in that regard. I have five two-week long sessions going right now and there's been no degradation in performance or efficiency. It's much better at carrying rules/learnings forward even in long-running sessions and grounding/refreshing itself in verified facts when it loses context. Its funny because in two weeks I've gotten way more done with GPT5.5 with way fewer tokens and way less handholding. I think this goes to show how important tooling and the harness is and how a capable model like Opus 4.7 can be severely handicapped by bad product decisions.

gnat 5mo ago
Being able to mange context over long running sessions is a function of the harness, not the model. Are you using Claude Code with GPT5.5? Codex? piclaw? They’ll all have different context management strategies to let you keep going when you would otherwise have filled up context and be forced to stop.
- beering 4mo ago
  It doesn’t matter how good the harness is if the model does a bad job of planning and continuing from long context. A good harness cannot overcome a weak model.

josefritzishere 5mo ago

AI slop ruined a story about AI? This thread is a story about itself.

rnxrx 5mo ago

Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?

ares623 5mo ago
There is no profit, expense, revenue. Those don't matter. Only thing that matters is stock price goes up, and laying off makes stock price go up. When laying off make stock price go down, then laying off stop.
- stock_toaster 5mo ago
  I imagine layoffs are also very much "this quarter and next quarter" with regards to investor visibility. While LLM Opex is "some future quarter" and very easy to co-mingle with other expenses.
thewebguyd 5mo ago
I suspect AI would have to get drastically more expensive before it starts looking worse than payroll. If one developer using Claude Code can effectively substitute for 2 developers, you are already coming out ahead at current API pricing assuming very heavy usage, your cost is going to be ~1.5x developer (factoring in beyond salary - benefits, PTO, the other overhead that comes with having employees). So you're getting 2 for the price of 1.5. Scale that up to 500 devs at a big company and it's a big chunk of change saved on payroll. Keeping your headcount or hiring humans instead, AI would have to start to cost upwards of $15k/month/developer or more before it costs more than hiring. You're looking at about 4 billion tokens per month before humans start to break even or are cheaper.
- jayd16 5mo ago
  You're starting from the assumption that its a 2x benefit. That's a massive leap.

skeledrew 5mo ago

Well, that's the inevitable outcome of token-maxxing :shrugs:

wg0 5mo ago

Microsoft should host DeepseekV4 internally for its developers. And you're welcome.

rvz 5mo ago
This is the smartest solution to do, to self host the model locally on premise.
- kridsdale1 5mo ago
  And by that, you mean, in Azure, surely.
chris_money202 4mo ago
Microsoft does self host claude and gpt for GHCP

othmarodev 5mo ago

[flagged]

sergiomattei 5mo ago

My impression is they're being cancelled in favor of full internal adoption of Copilot CLI, which has got much better over the past few months.

Shalomboy 5mo ago
I'm also a big fan of Copilot CLI, especially after demoing it to a coworker who liked Claude Code.

andrewl-hn 5mo ago

I'm surprised they even had them in a first place. Doesn't Microsoft have a deep partnership with OpenAI? Aren't all Copilot things powered by various GPT models? I would assume the two companies have barter agreements of sorts.

RevEng 5mo ago
They do have agreements, but they aren't exclusive, and Microsoft and Open AI have had a rather public falling out over the last year.

relevant_stats 5mo ago

So, snippet from the article says the following: > 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. And people here are interpreting this as related mainly to the Claude burning too much tokens too quickly and suggesting Microsoft should rather use SomeOtherLLM©? Is this Hacker News or rather Marketing Wars?

RobRivera 5mo ago
Por que no los dos? Eso mensaje de hijo de Carlos
- relevant_stats 5mo ago
  Äh, was?
johnnypangs 5mo ago
I don’t think people read the article, I didn’t until I saw your comment. The article feels like clickbait tbh.
s_dev 5mo ago
So "Microsoft chooses to eat its own dogfood" is a more accurate title?
ninjagoo 4mo ago
> Is this Hacker News or rather Marketing Wars? No public forum is naturally immune to the spread of (guerilla) marketing. [1] [1] Internet Rule #48
righthand 4mo ago
It's a forum called Hacker News that's been hacked and covertly refactored into Marketing Wars. Being their primary goal is to foster a space to draw-in (marketing) projects/start-ups.

wolvoleo 5mo ago

What's the point of eating your own dog food when the only thing you are doing is reselling other people's dog food? Microsoft don't have any competing LLM.

jasondillingham 5mo ago

[flagged]

DeathArrow 5mo ago

Doesn't MS have the compute to run GPT 5.5 for all its employees?

nobodywillobsrv 5mo ago

This feels like these kind of bad incentive problems we always here about on here ... Like bugs and vipers.

gmerc 5mo ago

They got DeepSeek on Azure, would cut costs by 10x … if they ran it on Huawei

matt3210 5mo ago

Tokens aren’t that much of an issue when your not evaluated on the usage

sreekanth850 5mo ago

If you properly keep documents, architecture, and decision records, token consumption can be pretty less. Iam managing everything with two codex plus sub. Repo size is 300 k loc ( backend).

iamflimflam1 5mo ago

From reading the article. They offered their developers both Claude code and Copilot. What they wanted was for them to use both and feedback which was better. The developers voted with their feet and didn’t use Copilot. What Microsoft were hoping was that the opposite would happen...

cfunderburg 5mo ago
I wish I could understand the appeal of using Claude Code inside VScode rather than Copilot. I feel like I'm missing something obvious.
- stanac 5mo ago
  I think they were comparing CLIs, not VS extensions.
- darig 5mo ago
  [dead]
- rplnt 5mo ago
  Slightly related (me not understanding) is why the Copilot in VS code is essentially just CLI interface. Why can't it use the IDE tools (search, LSP, ...). All it ever does is trying to execute grep.
  - skywhopper 5mo ago
    Because it’s far far easier to make a text-generation machine generate text that has decades of how-to explanations on the Internet than to correctly work an internal editor API that changes often and isn’t as well-documented. Especially if you want effective results.
    - avadodin 4mo ago
      Claude Copilot does seem a bit more lost on the interface side than other models, but then again all of them are. Only the baseline tier seems to have been fine tuned to the platform.

keyle 5mo ago

The title is somewhat bait. It reads like MSFT is using less AI, while in fact it's just a force swap to Copilot. Arguably, Copilot is GPT 5? Not sure what the CLI offers behind the covers.

patentlyze 5mo ago
I disagree. As someone who just got a new Windows laptop with Copilot baked(forced) in I've tested Copilot a lot. It. is. so. bad. It feels like it's at least 1-2 years behind the current top models.
- gbro3n 5mo ago
  But there isn't a copilot model is there? Just a harnesse, and the vscode copilot extension is pretty good (haven't tried the tui)
- tored 5mo ago
  Copilot is not the same agent as GitHub Copilot.
- keyle 4mo ago
  Your Copilot free offering isn't the Copilot they're using within the company for coding assistant. It's confusing I know.
- alternatex 4mo ago
  Copilot cannot be behind any models because it's a harness, not a model. You can use any of the popular models through it, including Claude models. Though people have been saying that Claude CLI is a better experience.
meowkit 5mo ago
Copilot is the name for the harness / wrapper of MSFT products The CLI can swap to whatever model (/models) based on your subscriptions. The copilots on desktop or Office Apps are likely just GPT5 nano or other tiny models with cheap inference
5mo ago

usernametaken29 5mo ago

I switched to OpenRouter and OpenCode a while ago. It is much cheaper, much much cheaper, and A LOT more reliable. Particulary Gemini was a piece of trash when it came to uptime

zabil 5mo ago

I switched from Claude code to the GitHub copilot app recently. Since our repositories are hosted on GitHub I find the copilot app better integrated for the PR workflow with PR management available in the app. I don’t think I miss any of the features of Claude code I never thought I would make the switch but copilot upped the game. Also it became very hard to convince management to keep both Claude code and GitHub Copilot enterprise licenses.

mstralman 5mo ago

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cbdevidal 5mo ago

I’ve been quite content with CoPilot’s $10/mo plan. Still offers access to Claude models (limited tokens) but has no time limits like the $20 Claude plan, so no interruptions in work flow. I use one of the free models for the more pedestrian tasks then sic Claude on the particularly thorny problems. Works very well for me.

cbdevidal 5mo ago
Can even buy more premium tokens for more Claude use, which I have done once. But most of the time the tokens included in the plan are sufficient.
mellosouls 5mo ago
I'm not sure if you are referring to the old or new plan? Github Copilot offered probably the best value and was IMO underappreciated for a long time; I've been an annual subscriber since day 1. The changes announced a few days ago completely revoke that value proposition, I doubt I'll continue with it.
- cbdevidal 5mo ago
  There’s a new plan? Ugh. I signed up about five months ago.
  - mellosouls 5mo ago
    Yes, unfortunately. eg. discussions below - I think I have seen multipliers of 9x cost to existing use cases: Changes to GitHub Copilot individual plans https://news.ycombinator.com/item?id=47838508 https://news.ycombinator.com/item?id=47838508 GitHub Copilot is moving to usage-based billing https://news.ycombinator.com/item?id=47923357 https://news.ycombinator.com/item?id=47923357 Multipliers for annual subscribers: https://docs.github.com/en/copilot/reference/copilot-billing/model-multipliers-for-annual-plans https://docs.github.com/en/copilot/reference/copilot-billing...
    - cbdevidal 4mo ago

dminik 5mo ago

To be fair, Microsoft dogfooding something for once would be great.

maxignol 4mo ago

This might actually be clever since Microsoft dev will be longing claude code features and might result in copilot getting way better

ryanhecht 4mo ago
That's what we've spent the last five months doing! Have you tried the Copilot CLI recently? We've onboarded loads of feedback from Microsoft devs who were switching from Claude Code -- I'm proud of how far the team has come! This announcement comes at a time where Copilot CLI usage has been greater than Claude Code usage at Microsoft for several weeks; we've been winning hearts and minds!

wilt6269 4mo ago

[dead]

harimau777 4mo ago

The comments I see recommending selective use of cheaper models doesn't match the reality I experience working in the industry. I have the constant threat hanging over my head of being fired if I don't churn out code quickly enough. I'm not willing to gamble with my livelyhood by using a less effective model. Saving money on tokens isn't something that's rewarded during performance reviews; particularly because it's difficult to quantify how much you saved versus hypothetically using a more expensive model.

cowsandmilk 4mo ago
This, if you’re high performing, the company won’t question your use of tokens. If they want to limit it, they have ways to set limits on spend and usage.
krzyk 4mo ago
If you have such toxic environment, run.
- mschuster91 4mo ago
  Where to, that's the question. The economy is in the gutters and the replace-people-with-AI craze is making the issue even worse.
  - ponector 4mo ago
    And open positions are simply because someone decided to run from that place
  - ggititel 4mo ago
    Perhaps for now. But you know, after working solid with AI for two years and adopting effective methods using detailed plans, and having a lot of success with it, here is the problem: Coding faster leads to less understanding and higher long-term risk. Source-Code amnesia is real, and there’s a time requirement to really understand and appreciate what a system is actually doing. I’ve been able to implement very large features using frontier models, but the code needs to always be revisited. AI can do two things: find vulnerabilities, and prototype code. It cannot design software, and any appearance of such is an illusion at best. We don’t need to produce faster to be successful, we need to create better, long lasting products.

jgalt212 4mo ago

What per cent of internal Microsoft IP runs through Anthropic? Do they not care about trade secrets, or certain groups allowed or not allowed to use tools that expose IP to external vendors?

heisenbit 4mo ago

How would one call such a strategy? Embrace and extend comes to mind.

lou1306 4mo ago
This has really little to do with embrace and extend. They are not taking over an open standard or anything like that. If anything, it's forced dogfooding, i.e., forcing their own workforce to beta-test their product.

plaidfuji 4mo ago

Our shop is forced to use Copilot on gov cloud, and it’s so useless I usually stick to manually coding. Its syntax is messy, it randomly combines lines together, flips order, or drops a couple tokens worth of output in the middle of a line, and for some reason it consistently drops the last line of every code block. I assume we’re getting a few versions back of GPT under the hood. But it does make me appreciate how the models of the past year or so crossed the threshold from interesting to truly productivity-enhancing. Between Copilot, Claude, and Gemini, I still actually prefer Gemini. I do a lot of scientific writing in addition to coding and Gemini is the only model I can trust to “just be right”. This trust then transfers over to its code output.

totalhack 4mo ago
If you are talking about the Copilot built into vs code, that's not been my recent experience at all. Very capable in agent mode since gpt 5.4 came out.
- siva7 4mo ago
  Especially since gpt 5.5 it's on par with Opus 4.7 or Sonnet.

la64710 4mo ago

It seems that people are using LLMs to generate code but many complain of sub par code. I recall the early days of virtualization when folks will use it but complain about performance. HW capacity continued to improve until virtualization became de facto standard. I wonder if sub par code will become better as more powerful agents models or compute become available.

goldylochness 4mo ago

after having used claude for quite some time, i would buy puts on microsoft

loloquwowndueo 4mo ago

Reminds me of when Steve Ballmer forbade his children to use iPods and pushed towards the Zune instead. Hahaha

bel8 4mo ago
1) They can still use Anthropic models. 2) Opus is not even unambiguously best at coding anymore. GPT 5.5 splits that title for some time now. 3) I would have probably done the same in his position. Dogfood the product.
- loloquwowndueo 4mo ago
  Dogfooding only works if it actually helps improve the product. zune never improved. Dogfooding without improving is just eating dog food for no good reason.
  - bel8 4mo ago
    Sure success is not guaranteed. But dogfooding helps. Should Microsoft have stopped dogfooding because of Zune? They are worth multiples of trillion dollars so I would wager they know a little more about success than you and me.
    - loloquwowndueo 4mo ago
      > They are worth multiples of trillion dollars so I would wager they know a little more about success than you and me. Hahahaha. Are you saying that if we did what they do we’d be successful? Because I’m perfectly happy to be where I am if it means I’m nothing, nothing at all like Microsoft.
      - bel8 4mo ago
        I'd keep the conversation to dogfooding and how it helped Microsoft achieve unique status, but you do you.

jadar 4mo ago

It's been said that technologies are not product. CC might be better, but at the end of the day M$ is going to want to cut costs and have employees use their own technology. Perhaps Copilot CLI is close enough, and the CC product doesn't justify the cost of the Claude (technology) license when M$ has their own technology to leverage. Side note, it's so frustrating that The Verge puts a paywall at the fold. It makes me feel like the rest of the story is not worth reading. I'm not inclined to pay $2 to read a link that was posted on an aggregator.

thisislife2 4mo ago

More here: Microsoft reports are exposing AI's real cost problem: Using the tech is more expensive than paying human employees - https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tokens-agents/ https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tok...

Kapura 4mo ago

"everybody needs to use these new AI tools or you will be left behind. no! not like that! the cheap, worser ones!"

geoffbp 4mo ago

How efficient is Claude at cleaning up unused code and making things more simple - as good as it is at adding code / features?

gradientsrneat 4mo ago

Related: Microsoft-owned GitHub recently switched to token-based billing: https://github.blog/news-insights/company-news/github-copilot-is-moving-to-usage-based-billing/ https://github.blog/news-insights/company-news/github-copilo... Claude tokens are priced by GitHub at a disproportionately premium price compared to Gemini and OpenAI. I wonder why? https://docs.github.com/en/copilot/reference/copilot-billing/model-multipliers-for-annual-plans https://docs.github.com/en/copilot/reference/copilot-billing...

fredcallagan 4mo ago

I have noticed particularly in recent weeks and maybe couple of months that token costs are just ridiculous. I can understand the upcoming IPOs and instinctive pressure to show profits ... but let's be honest, showcasing burning 1.3 million USD in tokens by a single developer in a month is the most ridiculous thing I have seen in my entire life. The general principles still apply. You expect investing X and have a return on such investment. Unfortunately that's not so easy to promise or expect. There's no real 1 to 1 correlation between amount of code written and returns, and even less between tokens burned and returns. I start to believe that the current token pricing approach, followed at the moment by all leading labs (especially considering OS models capabilities), is bordeline delusional ...

visualphoenix 4mo ago

Good luck to them! I recently had the misfortune of fighting Copilot on a Github PR and it made me want to never contribute to the project again.

Akamant 4mo ago

It seems like new Holy Wars will rage between those who can afford models like the Opus 4.7 or GPT 5.5 Pro, which in my opinion are unlikely to have been used for anything serious, as they're simply several times more expensive than any human effort. There's a speed advantage (still questionable), and quality isn't guaranteed, but the price completely kills everything. And between those who actually write the code and calculate the development costs. I won't talk about large corporations that can afford it, much less those who develop models. "Mere mortals" simply don't have such opportunities. 17 GoLang microservices for a serious project were written perfectly using the latest version of QWEN. The only areas where we really had to work hard were documentation and a very serious task breakdown. All of this was tested, and yes, a review was required, but everything was within reason. The deadline was 10 days of 24/7 work, including the review. When attempting to submit the same task, Opus 4.7/4.6 had to be stopped after three hours. If you have significant resources for experimentation, you can certainly try. For us, the choice is absolutely clear at this point.

pratikel 4mo ago
I’m curious to learn of your problem where you needed 17 Golang microservices (assuming these are newly created).

talatidv 4mo ago

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