Microsoft
- Microsoft’s GitHub is facing competition from new AI coding tools including Cursor and Claude Code.
- To address the challenge, Microsoft wants to make its AI tools available anywhere developers work.
- Microsoft executives discussed the plan in an internal meeting reviewed by Business Insider.
Microsoft plans to ward off competition from AI coding tools by overhauling its GitHub service, according to audio from an internal meeting reviewed by Business Insider.
The transformation has its roots in something that used to frustrate cofounder Bill Gates.
“Bill used to always say that there’s only one category: It’s called Information Management,” CEO Satya Nadella said in the meeting. “In fact, the thing he used to get frustrated by is, why the heck do I have a different app for writing a document, a different app for a website, and a different (development software) for writing an app?”
AI is finally erasing those boundaries, and Microsoft wants to restructure its GitHub software development platform to provide its tools wherever developers work.
“What’s the difference between an app and a document and a website?” Nadella said. In the AI world, “there is none.”
GitHub, which Microsoft acquired in 2018, had an early lead because of its popularity as a place to store code along with a partnership with OpenAI. Lately, though, GitHub has faced more competition from AI tools such as Cursor and Anthropic’s Claude Code.
Microsoft’s AI coding assistant, GitHub Copilot, was the top tool of choice in a recent survey by Jellyfish. But the tool recently lost share in a key part of the developer market to Cursor, according to data cited in a recent note from Barclays.
A Microsoft engineer in the internal meeting asked executives to explain how the company is addressing competition from these tools, particularly Cursor or Claude Code, which they characterized as “moving quickly and capturing a lot of mindshare.”
“GitHub is just not the place anymore where developers are storing code,” Microsoft executive Jay Parikh said. “We want it to be the center of gravity for all of AI-powered software development.”
GitHub’s CEO left in August. And earlier this year, Nadella tapped Parikh to lead a new AI unit called CoreAI that oversees GitHub.
Microsoft wants GitHub’s AI tools to be available wherever developers work, not just inside one app, whether that’s in the command line interface, in a web browser, inside different coding apps like VS Code, or even within other Microsoft products. Microsoft also envisions GitHub becoming a kind of dashboard for managing multiple AI agents.
The company is also investing in improving the basic parts of GitHub, Parikh said, like its GitHub Actions tool that automates building, testing, and deploying code, analytics and insights tools so teams can see how their code is performing, security for keeping the code safe, and making sure the company can meet local data storage rules to offer GitHub in new countries.
“The team is shipping faster than it’s ever been shipping before, shipping updates to our users every day, if not multiple times a day,” Parikh said. “We’re gearing up for what should be the best GitHub universe ever.”
Parikh also echoed recent comments from Microsoft AI CEO Mustafa Suleyman that the company should work with and build more large language models rather than depending on its relationship with OpenAI.
“As new models come, as models go, we want to stay the place where developers have that choice of both surfaces that they work in, also modes that they work in, and the models that they work with,” Parikh said.
Microsoft earlier this year started working on a major upgrade of its flagship software-development product Visual Studio, a sign the tech giant is responding to intense competition from new AI coding tools, according to an internal memo viewed by Business Insider.
The company also asked some managers to evaluate employees based on how much they use AI internally, and the software giant is considering adding a metric related to this in its review process, according to another memo Business Insider viewed.
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