Developers have been comparing the strengths and weaknesses of Anthropic’s Cloud Code, Anysphere’s Cursor, and Microsoft’s GitHub Copilot for several months and are looking for a winner. While no individual AI coding tool manages to be the best at every task software developers perform daily, Cloud Code is quickly coming to the top due to its ease of use for both developers and non-technical users.
It seems Microsoft agrees, as sources tell me the company is now encouraging thousands of employees on some of its most prolific teams to take to the cloud and get coding, even if they’re not developers.
Microsoft first began adopting Anthropic’s Cloud Sonnet 4 model inside its developer division in June last year, before adopting it for paid users of GitHub Copilot several months later. Now, Microsoft is going one step further using Anthropic’s AI models and driving widespread adoption of cloud code across its largest engineering teams.
Microsoft’s CoreAI team, the new AI engineering group led by former Meta engineering chief Jay Parikh, has been testing cloud code in recent months, and last week Microsoft’s Experiences + Devices division was being asked to install cloud code. This division is responsible for Windows, Microsoft 365, Outlook, Microsoft Teams, Bing, Edge, Surface, and more.
Even employees with no coding experience are being encouraged to experiment with cloud code, allowing designers and project managers to prototype ideas. Microsoft has also approved the use of cloud code across all of its code and repositories for its business and industry Copilot teams.
I’m told that Microsoft software engineers are now expected to use both Cloud Code and GitHub Copilot and provide feedback by comparing the two. Microsoft sells GitHub Copilot as its customers’ AI coding tool of choice, but if these broader internal pilot programs are successful, it’s possible the company may eventually sell cloud code directly to its cloud customers as well.
Microsoft is now one of Anthropic’s top customers, according to a recent report from Information. The software maker is also counting on selling Anthropic AI models toward Azure sales quotas, which is unusual because Microsoft typically only offers its salespeople incentives for OpenAI’s homegrown products or models.
Microsoft’s decision to more widely adopt cloud code among its engineering teams certainly looks like a vote of confidence in Anthropic’s AI tools, especially since it’s encouraging non-technical employees to try coding. But the reality is that Microsoft developers are likely to use a mix of AI tools, and the adoption of cloud code is just another part of that tool set.
“Companies regularly test and test competing products to gain a better understanding of the market landscape,” Frank Shaw, Microsoft’s communications chief, said in a statement. notepad. “OpenAI remains our primary partner and model provider on the Frontier model, and we remain committed to our long-term partnership.”
While Microsoft remains committed to OpenAI, it is increasingly working with Anthropic to bring its models and tools to Microsoft’s own teams and the software it sells to customers. Microsoft and Anthropic signed an agreement in November that allows Microsoft Foundry customers to gain access to Cloud Sonnet 4.5, Cloud Opus 4.1, and Cloud Haiku 4.5. The deal also includes a commitment by Anthropic to purchase $30 billion of Azure compute capacity.
Microsoft has recently begun to favor Anthropic’s cloud models inside Microsoft 365 apps and Copilot, using them in specific apps or features where Anthropic’s models have proven more capable than OpenAI’s counterparts.
The big question here is what does the increased use of cloud code at Microsoft mean for its 100,000-plus code repository? Microsoft told me last year that 91 percent of its engineering teams use GitHub Copilot and that various teams are using AI tools to speed up mundane tasks. Use of Microsoft’s AI tools has largely been limited to software engineers, but with Cloud Code and Cloud Cowork, Anthropic is focusing on making coding and non-coding tasks more accessible thanks to AI agent capabilities.
Microsoft is embracing the ease of use of cloud code to allow more non-technical employees to code using AI, and this extensive pilot will certainly highlight the challenges and benefits of that change. This also puts pressure on junior developer roles, with fears in the industry that these roles are rapidly disappearing due to AI. Microsoft has taken another big step toward a future where more autonomous AI agents are creating code, taking control away from its software engineers.
Microsoft is getting ready to show off two of its biggest Xbox games this year, forza horizon 6 And fableLater today as part of its Xbox Developer Direct stream. First of all, a thorough observation will also be done animal of rebirth And at least one other game is shown, I’m hearing. ready to double fine Show off KilnA multiplayer, team-based brawler. I understand Double Fine has been holding a playtest recently, where you play as a spirit that can inhabit clay pots and carry water to stoke an opponent’s kiln and extinguish fires.
wouldn’t be surprised to see me Kiln Will appear as an early preview in the coming months, then forza horizon 6 in may and then Halo: Campaign Evolved. I keep listening to both of those fable And Gears of War: E-Day Currently targeting a release in the second half of this year. Microsoft is keen to release new forza, gears, haloAnd fable Games in 2026 to mark 25 years of Xbox.
- Microsoft’s first Windows 11 update of 2026 stopped some computers from shutting down. It’s only January and Microsoft has had to come up with an emergency out-of-band fix that has stopped some Windows 11 PCs from shutting down. The issues were limited to machines running Enterprise and IoT editions of Windows 11 version 23H2, but this is another bad update for Windows, which is becoming increasingly common.
- Microsoft’s free Xbox cloud gaming is coming with ads soon. Microsoft is getting closer to launching its own free streaming option for Xbox cloud gaming. The ad-supported feature has begun appearing inside the Xbox app for PC, showing “1 hour of ad-supported playtime per session.” I’m expecting to see this rollout with preroll ads in the coming weeks, but there may be a limit to five hours of free per month.
- Microsoft wants to build 15 data centers in Mount Pleasant, Wisconsin. Vacant land formerly owned by Foxconn is about to be transformed into a Microsoft data center. Local village leaders in Mount Pleasant, Wisconsin, approved plans for data centers earlier this week, and final approval could come next week. Foxconn’s failed Wisconsin project promised 13,000 jobs, but now that land will be filled with a 1.2 million-square-foot data center project housing hundreds of thousands of Nvidia’s AI GPUs.
- The Xbox app is now available for all Arm-based Windows 11 PCs. After a rough start to gaming on Windows on Arm, Microsoft updated its Xbox app this week so it’s fully compatible with all Qualcomm-powered devices. More than 85 percent of the Xbox Game Pass catalog is now compatible with Arm-based devices as well, but most games will still need to be emulated using Microsoft’s Prism technology.
- Microsoft Paint now has an AI-powered coloring book. Microsoft is adding more AI features to its Paint app this week. Windows testers can try it now coloring book feature Which lets you create coloring book pages from text prompts. It’s available inside the CoPilot button in Paint, and you must have a CoPilot Plus PC to be able to use it. Notepad (the app!) is also getting expanded Markdown syntax features and a new welcome experience to highlight features. I never thought I’d see the day when Notepad, a lightweight app, would need a welcome screen because of all the features Microsoft packed into it.
- GitHub has a new Copilot SDK. Microsoft is announcing its technology preview GitHub Copilot SDK Today, that brings the power of GitHub Copilot CLI to any app. It essentially allows developers to bring GitHub Copilot capabilities to Python, TypeScript, Go, and .NET as a programmable SDK. Microsoft Teams already uses it to create custom GUIs for agents, summary tools, YouTube chapter generators, and more.
- Satya Nadella and former British Prime Minister Rishi Sunak talk AI. Former leader of Britain rishi sunak Last year, he played the role of senior advisor at Microsoft and Anthropic and now he is seen with the CEO of Microsoft. Satya Nadella To discuss the future of AI. Roughly speaking 30 minute conversation No surprising news, but Sunak agreed with Nvidia CEO jensen huang That “you may not lose your job because of AI, but you may lose your job because of someone using AI.” Nadella thinks AI will make us all “managers of infinite minds,” just as we have “information at your fingertips.”
- Microsoft now sponsors Mercedes-AMG F1 team. Microsoft is switching its F1 allegiances from Alpine to Mercedes-AMG for the 2026 season. A New multi-year partnership The Mercedes-AMG race team will use Microsoft technologies for operations and will feature the Microsoft logo in key locations on the 2026 Mercedes-AMG F1 car and racing suit. There has been a major technical overhaul for the 2026 season with all-new chassis, power units and fuel regulations.
I’m always eager to hear from readers, so please leave a comment here, or you can contact me at Notepad@theverge.com if you’d like to discuss anything else. If you’ve heard about a secret Microsoft project, you can contact me via email at Notepad@theverge.com or talk to me confidentially on the Signal messaging app, where i am tomwarren.01. I’m also tomwarren on Telegram if you’d prefer to chat there.
Thank you for subscribing notepad.
