Microsoft data suggests using AI is more expensive than hiring people

Microsoft’s latest AI pullback is raising an uncomfortable question for the tech industry: What if using artificial intelligence at scale ends up costing more than the labor it’s supposed to streamline?

Microsoft is canceling most of its direct Claude Code licenses just months after encouraging employees to embrace the tool.

Fortune, citing The Verge, said that Microsoft steered engineers away from Anthropic’s Claude Code and over to GitHub Copilot CLI, even though access to Claude Code was opened only about six months ago. Thousands of developers, designers, project managers, and other employees had reportedly been urged to try it, and the tool seems to have spread quickly.

The change does not alter Microsoft’s broader Foundry arrangement with Anthropic, which involves a multibillion-dollar commitment and customer access to Claude models. However, it does suggest that internal use may have become hard to justify at the scale…