Microsoft is canceling its internal Claude Code licenses after the pilot program's costs spiraled beyond expectations. The cancellation, affecting the company's Experiences & Devices division, will take effect by June 30, 2026, barely six months after the pilot launched in December 2025.
The directive is simple: developers should use GitHub Copilot CLI instead.
After deploying Claude Code to 5,000 engineers, Uber reportedly burned through its entire 2026 AI budget of $3.4 billion in just four months. Monthly usage rates among Uber's engineers hit 84-95% by April 2026. Per-engineer API costs ranged between $500 and $2,000 monthly.
AI software prices across the US have reportedly climbed 20-37%, reflecting the growing gap between expected costs and actual expenses at scale. GitHub is responding: starting June 1, 2026, all Copilot plans will shift to usage-based billing through GitHub AI Credits.
The Claude Code cancellation doesn't mean Microsoft is breaking up with Anthropic. The company retains access to Claude models across other Copilot features and has invested $13 billion into OpenAI, maintaining relationships with multiple AI model providers.
The shift from flat-rate to usage-based AI billing introduces expense volatility for companies deploying these tools. Quarterly earnings could swing based on how heavily engineering teams lean on AI assistants.