By Timothy Green
Publication Date: 2026-02-04 02:45:00
The software giant is being out-innovated by AI start-ups.
Shares of Microsoft (MSFT 2.86%) crashed last week following the tech giant’s latest earnings report. Investors were likely uneasy about a slowdown in cloud growth, a massive increase in AI infrastructure capital expenditures, and the revelation that nearly half of its backlog was tied to OpenAI.
Image source: Getty Images.
There was potentially another reason why investors turned on Microsoft: AI start-up Anthropic. Anthropic’s Claude Code programming tool reached a $1 billion revenue run rate in just six months, and it’s not hard to see why. Putting its powerful AI models in a loop to work through problems, with tooling that enables web search, file access, and more, turns out to be an incredibly effective way to write code.
In January, Anthropic announced a research preview of a new product called Cowork. Microsoft should be very worried.
“Why isn’t Microsoft doing that?”
Anthropic Cowork is essentially Claude Code, but…
