Microsoft starts canceling Claude Code licenses

robertkarl

Cancellation effective June 30. This was a _pilot_ launched in December that accidentally consumed their 2026 yearly target spend on AI! I expect the r/LocalLLaMA guys to be going nuts about this news.

ndiddy

This is an AI generated summary of a blog post ( https://www.thelowdownblog.com/2026/05/microsoft-cancels-int... ) which is a summary of an AI generated article ( https://blazetrends.com/microsoft-cancels-claude-code-pilot-... ) which is a summary of another AI generated article ( https://www.themodelwire.com/article/microsoft-starts-cancel... ) which is a summary of an article from The Verge ( https://www.theverge.com/tech/930447/microsoft-claude-code-d... ). I guess it would be better to link the Verge article instead.

andyfilms1

Surely a company as large as Microsoft is actively attempting to build their own models. They couldn't possibly have expected to stake the future of their software development on the conditions of a third party company?

tra3

There's definitely a way to use Claude code that is token conscious. I've tried throwing unsupervised agentic software factory workflows against the wall, and they burned through my tokens like nobody's business but didn't produce much. Supervised, human-in-the-loop process on the other hand is much more productive but doesn't consume nearly as much. Maybe that's why everyone's pushing agentic approaches so much.

killerstorm

The way coding agent work is fantastically wasteful. All the megabytes of code are processed over and over and over, sometimes withing just one session. There are papers describing KV cache precomputation for commonly used documents (e.g. KVLink), but, of course, it's not a priority for model providers: they'd rather sell you more tokens, also they would rather get to AGI/ASI first than optimize usage of existing models...

guluarte

I think tech companies are doing layoffs partly because they need to cover AI operating expenses.

zkmon

My experience is, Claude Code burns way more tokens compared to other agents, probably to ensure high levels of perceived quality, which is, most of the times not worth the bloat for the user. The bloat works for Anthropic as an advertisement at the cost of your tokens.

tyleo

Lots of these places measure employee token use with managers having dashboards. It seems like performative code production rather than making anything useful. Speed without judgement always compounds badly.

thadk

Microsoft poorly manages token use of most expensive models in a pilot. Then they use that failure to advertise/position their own Github Copilot agents to procurement teams, over the now widely validated Claude Code-based agents. At least Codex is trying to win validation on merit.

uniclaude

That's very interesting to reconcile with the fact that not too far, Amazon employees feel incentivized to use as many tokens as possible.

proxysna

Feels about right. I've launched an internal demo of Claude Code and Deepseek on the same day and we burned through our monthly allowance for Claude in just over a week, with more than a half of that budget being spent in one day. With DS people are unable to go through that same amount of money in a month, not even close. With that Claude feels like an expensive toy, while DS is a shovel, purely because developers do not feel like they are eating into a precious resource while using it. Also it does not feel like there is much of a difference in capability between Claude and DS-pro. DS-pro and flash do feel like sonnet/opus and haiku, but flash is still very-very capable.

dsagent

I think whats funny is that employees were most likely already covering the cost for these tools because they are useful. Companies didn't believe employees were using these tools and now have forced their usage and no longer have the costs subsidized. Similarly companies seem to reward high token usage as a sign of someone willing to play ball with AI and again have forced higher costs on themselves for people reward hacking or using tokens out of spite.

o10449366

I switched from Anthropic to OpenAI after spending ~$40K in equivalent token costs using Claude over 3 months. I found Opus 4.7 to be slow and wasteful with token usage. It's shocking how inefficient it is with tasks like bash tool usage and web searching, delegating them to a dozen subagents only to get stuck and never return until you esc and intervene. That, in addition to all of the broken tooling Anthropic built in to limit token usage like the broken monitoring tool made managing Claude a chore. I was happy to pay $200/month for Opus 4.5 when they had more capacity, but 4.7 felt like a huge step back and no longer worth the price and inconvenience. I remember an OpenAI employee comment on the GPT5.5 release post about how they specifically geared it towards long-horizon tasks and its been a breathe of fresh air in that regard. I have five two-week long sessions going right now and there's been no degradation in performance or efficiency. It's much better at carrying rules/learnings forward even in long-running sessions and grounding/refreshing itself in verified facts when it loses context. Its funny because in two weeks I've gotten way more done with GPT5.5 with way fewer tokens and way less handholding. I think this goes to show how important tooling and the harness is and how a capable model like Opus 4.7 can be severely handicapped by bad product decisions.

josefritzishere

AI slop ruined a story about AI? This thread is a story about itself.

rnxrx

Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?

skeledrew

Well, that's the inevitable outcome of token-maxxing :shrugs:

wg0

Microsoft should host DeepseekV4 internally for its developers. And you're welcome.

sergiomattei

My impression is they're being cancelled in favor of full internal adoption of Copilot CLI, which has got much better over the past few months.

andrewl-hn

I'm surprised they even had them in a first place. Doesn't Microsoft have a deep partnership with OpenAI? Aren't all Copilot things powered by various GPT models? I would assume the two companies have barter agreements of sorts.

relevant_stats

So, snippet from the article says the following: > I understand that Microsoft is planning to remove most of its Claude Code licenses and push many of its developers to use Copilot CLI instead. While Claude Code has been a popular addition, it has also undermined Microsoft’s new GitHub Copilot CLI coding tool — a command line version of GitHub Copilot that runs outside of development apps like Visual Studio Code. And people here are interpreting this as related mainly to the Claude burning too much tokens too quickly and suggesting Microsoft should rather use SomeOtherLLM©? Is this Hacker News or rather Marketing Wars?