Microsoft and Uber Are Running Into an Expensive New AI Problem

Microsoft is cutting off internal access to Anthropic's Claude Code for thousands of its developers, just as Uber admits it cannot find a clear return on investment after its engineers burned through an entire annual AI budget in four months.

The dual moves mark a sharp shift in how the tech industry handles the surging infrastructure costs of autonomous development tools. While Microsoft is forcing a hard migration back to its own GitHub Copilot tool, Uber is going through an internal crisis over whether spiraling token consumption is worth sacrificing engineering headcount.

Microsoft told thousands of its engineers on May 14 to stop using Claude Code, an AI coding assistant made by Anthropic, and switch to GitHub Copilot CLI, Microsoft's own AI coding tool, by June 30.

The affected engineers work on products like Windows, Microsoft 365, Teams, Outlook, and Surface, inside a division called Experiences and Devices. The story was first reported by The Verge's Tom Warren, who noted that Claude Code had become "perhaps a little too popular" inside Microsoft, with engineers choosing Anthropic's tool over Microsoft's own.

In an internal memo, Microsoft EVP Rajesh Jha explained the decision as a push toward standardizing on one tool. "Claude Code was an important part of that learning," Jha wrote. "At the same time, Copilot CLI has given us something especially important: a product we can help shape directly with GitHub."