Microsoft to Cancel Most Claude Code Licenses by End of June

Microsoft is canceling the majority of its Claude Code licenses and directing developers to use GitHub Copilot CLI instead. The company first opened access to Anthropic’s Claude Code tool in December, inviting thousands of its own developers, project managers and designers to experiment with coding daily.

Sources told The Verge that Claude Code proved popular inside the company over the following six months. Microsoft’s Experiences + Devices group, which is responsible for Windows, Microsoft 365, Outlook, Microsoft Teams and Surface, will wind down its use of Claude Code by June 30.

Engineers are being encouraged to transition their workflows to GitHub Copilot CLI in the coming weeks. The cutoff coincides with the end of Microsoft’s current financial year. The company told employees the move is intended to converge on Copilot CLI as its main agentic command line interface tool.

Sources told The Verge the decision is also driven by a desire to reduce operating expenses as the new financial year begins 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,” Rajesh Jha, executive vice president of Microsoft’s experiences and devices group, said in an internal memo.

” Microsoft had encouraged employees without coding experience to try Claude Code for prototyping. The company originally expected staff to use both tools in parallel to compare them and provide feedback. In recent months, however, Microsoft’s developers have favored Claude Code over GitHub Copilot CLI.

Anthropic’s models will remain available inside Copilot CLI alongside internal Microsoft models and OpenAI’s models. Microsoft employees continue to use Anthropic’s Claude models inside Microsoft 365 apps and Copilot, where they outperform OpenAI counterparts on certain tasks.

The company also recently worked with Anthropic to integrate technology from Claude Cowork into Microsoft 365 Copilot. The decision will not affect a separate November agreement that gives Microsoft Foundry customers access to Claude Sonnet 4.5, Claude Opus 4.1 and Claude Haiku 4.5.

Microsoft became one of Anthropic’s largest customers earlier this year and has counted sales of Anthropic models toward its Azure quotas. GitHub Copilot usage among Microsoft’s engineering teams stood at 91 percent last year. Increased adoption of Claude Code has affected that figure, prompting the company to focus on improving Copilot CLI with direct input from its own engineers.

Microsoft is asking developers to submit bug reports and feedback on Copilot CLI before the Claude Code licenses are removed.