Microsoft restricts Claude Fable for employees over data retention concerns

Anthropic released Claude Fable, its first Mythos-class AI model, yesterday and it’s already causing concerns inside Microsoft. Sources tell me that Microsoft is limiting the use of Claude Fable 5 for employees because of Anthropic’s new data retention requirements.

While Microsoft quickly rolled out Claude Fable 5 to its GitHub Copilot and Foundry customers, I’m told the model isn’t available in the model picker that Microsoft employees use for internal versions of GitHub Copilot. All other Claude models are still available internally at Microsoft, because they operate under Zero Data Retention (ZDR) rules.

I understand that Microsoft has been telling employees that its legal teams are evaluating changes to Anthropic’s data retention requirements. I’m told that the main concerns are around customer data and confidential information, and that it’s not yet clear whether Microsoft’s legal teams will clear Claude Fable for internal use.

Claude Fable 5 requires data…