Microsoft was positioned to win in AI coding. Outages got in the way

Microsoft Vibration had all the pieces to win in coding, thanks to the near-ubiquity of GitHub, which the company acquired for $7.5 billion in 2018.

But repeated outages, executive turnover, and the growing popularity of newer tools like Cursor and Anthropic’s Claude Code have destroyed GitHub’s initial advantage in generative AI and created another challenge for Microsoft CEO Satya Nadella as he tries to fix his company’s AI story.

GitHub’s reliability problems in recent months have affected large companies Ciscoand chronicled by influential figures in software development. Mitchell Hashimoto, co-founder of HashiCorp IBM’s purchased last year, wrote: blog post He said last month that GitHub “is no longer a place to do serious work if it blocks you for hours every day.”

Earlier Wednesday, GitHub in question In a security incident, an employee’s device was compromised. The attacker managed to compromise approximately 3,800 of GitHub’s own code libraries.

Some companies are looking for alternative tools that manage and distribute code. And there are options, whether GitLab or offers Amazon And Atlassian. Jyoti Bansal, CEO of software distribution startup Harness, said her company is even exploring launching a code storage feature.

“We are hearing real concerns from corporate customers and more are actively looking for alternatives,” Bansal said.

The era of artificial intelligence is proving to be even scarier for Nadella, whose 12-year experience at the helm of Microsoft is highlighted by a successful transition to cloud computing. As the prolific AI boom enters its fourth year, Microsoft has struggled to chart a clear path despite playing a central role early on due to the company’s massive investment in OpenAI and its vibrant cloud infrastructure business.

Microsoft, which has widely promoted its Copilot technology, has lagged behind its online rivals in creating AI tools and services that resonate with users. This helps explain why its stock price has lagged behind its megacap peers, down 13% this year.

Microsoft’s mistakes with GitHub are more obvious because the service gave the company a distinct home-field advantage for coders. There are six times more developers at GitHub than when Microsoft acquired the company eight years ago.

According to customer spending data from Ramp, a startup that issues corporate credit cards, GitHub is well ahead of GitLab in the devops market. And according to Stack Overflow 2025 developer surveyGitHub is the most popular tool for collaborative work management or code documentation.

The software repository market has seen a rise in usage with the introduction of AI-assisted coding or interlaced coding; agency AI has enabled developers to increase their production. Nadella said in October that GitHub was “growing at the fastest pace in its history, adding one developer every second,” reaching a total of 180 million developers. GitHub later in the year I started to see Faster growth in building code libraries and accepting code revisions.

“When it comes to developers, GitHub itself is seeing unprecedented growth with the proliferation of mediated coding, and we’re working hard to scale and meet that demand,” Nadella said in its last earnings call in April.

However, under increasing pressure, GitHub’s infrastructure collapsed. Since March, GitHub has been hit with more than a dozen incidents lasting more than an hour. status page.

“We failed to meet our own usability standards,” Vlad Fedorov, GitHub’s chief technology officer, wrote in a March post. blog post. At the time, 12.5% ​​of GitHub traffic was passing through a region of Microsoft Azure data centers in Iowa, and 50% of the traffic was planned to be served from Azure by July, he wrote.

Rather than relying solely on Azure, GitHub has relied on private data center infrastructure in Northern Virginia for years. There is effectively no space left on GitHub because of the extra load, said two people familiar with the matter who asked not to be named to discuss internal matters.

Information previously reported on GitHub outages.

GitHub leaders considered moving to Azure, which has data centers across continents, many times, but those plans were shelved, one of the sources said. The other said that GitHub was planning to move to Azure, but the transition was taking too long. Talks with Microsoft over capacity needs have delayed GitHub’s adoption of Azure, sources said.

Meanwhile, there is turmoil at the top. Thomas Dohmke announced he was stepping down as CEO in August after nearly four years on the job. There is no replacement yet.

Some GitHub employees went to work for Julia Liuson, a 34-year Microsoft veteran who runs the developer division. Liuson announced his retirement in April.

Earlier this month, Microsoft Xbox chief Asha Sharma, who previously worked at GitHub as head of product for the CoreAI engineering group, said GitHub VPs Tim Allen and Jared Palmer would be joining her division.

GitHub declined to comment.

Administrators even looked beyond Azure to handle heavy usage. Today the service relies on Amazon, GoogleMicrosoft and Seer For the maintenance of its own facilities as well as for cloud infrastructure.

“While we were in the process of migrating from our smaller private data centers to the public cloud, we started working on the path to multi-cloud,” Fedorov wrote in April. blog post. He said GitHub’s top priority is availability and making sure its services are working properly.

There have been some embarrassing fluctuations.

Ryan Oksenhorn, co-founder of drone delivery startup Zipline. wrote In a post on X last month stating that his company was evaluating GitLab and Atlassian Bitbucket after GitHub was taken back by mistake Code revisions were made followed by relevant instructions. recover changes. Oksenhorn called it a “horrible, terrible mistake” and noted that his company was still “cleaning up its mess” after GitHub failed to provide support.

One of the sources said that GitHub engineers, who can use GitHub Copilot as much as they want, do not always fully review the code suggested by AI representatives. A third person, who asked to remain anonymous to discuss internal matters, said corporate policy prohibits employees from merging code without human review.

Downtime isn’t the only problem.

“Right now, people are tired of instability, product churn, Copilot AI noise, unclear leadership, and the feeling that the platform is no longer designed for the community that makes it valuable,” said Armin Ronacher, creator of the open-source Flask software for building web applications. he wrote on his blog. “Obviously, GitHub also finds itself in the middle of an agency coding revolution, which is putting tremendous pressure on the people there. But the site has no leadership! It’s a miracle things are going so well.”

Outages affected part of the district CiscoDJ Sampath, the company’s vice president, said the issue has been communicated to its customers. Sampath said Cisco has “fail safes” and runs enterprise versions of GitHub on its own servers.

GitLab CEO Bill Staples is trying to capitalize on GitHub’s challenges.

“Still tired of the pain? Come to GitLab and take back control of your destiny,” Staples wrote. to post In X. “I’ll even give the first year free to anyone who signs a new three-year deal and migrates from GitHub.”

Without mentioning GitHub by name, Staples told employees: memory “Platforms not designed for machine scale are starting to buckle under this.”

OpenAI in question The number of people actively using the Codex coding agent in April rose to 4 million, up from less than 3 million less than two weeks ago. Anthropic’s Claude Code tool has grown in popularity this year; That’s a big reason why the company’s private market valuation recently jumped from $380 billion to $900 billion in February.

Cursor continued to rapidly gain usage, striking a deal with SpaceX in April that gave Elon Musk’s company the right to buy it for $60 billion. According to the company’s data, Cursor surpassed GitHub Copilot in market share about a year ago and maintained its leadership among customers using Ramp.

March survey of 636 software professionals from an engineering analytics startup Jellyfish GitHub showed Copilot to be less widely used than Claude Code and Google’s Gemini Code Assist. This comes after Nadella said in January that GitHub Copilot had 4.7 million paid Copilot subscribers, up 75% from the previous year.

GitHub was there first, announcing Copilot in 2021, one of the sources said. One of the sources said Fedorov was talking internally about the need for Copilot to regain the lead. Two people said managers forced employees to comply with Cursor’s latest features.

“The general impression is that they fell behind because they were a first mover, but then they didn’t evolve as quickly as some of the independents did,” said Tom Murphy, an analyst at tech industry researcher Gartner.

GitHub’s newest CEO, Dohmke, wrote in a post: in x He said last month that the company was not investing properly in AI, noting that more than 90% of employees were “assigned to the core product and primitives.”

“Making Copilot the scapegoat for usability issues is not something previous or current leadership would agree to,” he wrote.

GitHub said in April that it was temporarily turning down requests for new individual GitHub Copilot plans starting at $10 per month.

“As Copilot’s brokerage capabilities rapidly expand, brokers are doing more business and more customers are reaching usage limits designed to maintain service reliability,” said Microsoft Vice President Joe Binder. blog post. “Unless further action is taken, the quality of service will decline for everyone.”

GitHub wants to make Copilot’s economics more convenient. It will be in June start charging It depends on how many people use it. GitHub has provided a calculator to help customers calculate their new costs, and social media posts suggest the service has become quite expensive. This may lead some developers to give up on Copilot.

Jeremy Bray, former senior software developer at FanDuel Sports Network, said he stopped paying GitHub due to the price increase.

“I canceled my GitHub Pro account, so now I have the regular free account, which can’t do much,” Bray said.

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