Microsoft Begins Revoking Claude Code Licenses

Microsoft has begun mass revocation of licenses for Anthropic's AI coding tool Claude Code, which it had been providing to internal developers since last December.

The target is the Experiences + Devices (E+D) team, which handles Windows, Microsoft 365, Outlook, Teams, Surface, and others; they have been instructed to phase out Claude Code usage by end of June and migrate their workflows to GitHub Copilot CLI within the next few weeks.

The company explained this as a move to consolidate agentic CLI tools around Copilot CLI, but the industry views it as also having a cost-cutting aspect timed to the June 30 fiscal year-end.

In an internal memo, E+D Vice President Rajesh Jha acknowledged that Claude Code had been an important learning asset, while stating that Copilot CLI is a product that can be tailored to Microsoft's repository, workflow, and security requirements.

Behind this is a strong internal preference for Claude Code. Microsoft had encouraged non-developers such as designers and PMs to use Claude Code for prototyping, but over the past 6 months its usage spread rapidly, shaking GitHub Copilot CLI's position.

However, the partnership with Anthropic itself remains intact. Claude Sonnet 4.5, Opus 4.1, and Haiku 4.5 are still available on Microsoft Foundry and Microsoft 365 Copilot, and Anthropic models can also be called from within Copilot CLI.

As of last year, 91% of Microsoft's engineering team used GitHub Copilot, but this move is being read as a signal to bring the leadership in internal AI coding tools back toward Copilot.