Microsoft cuts Claude Code access as AI coding costs surge

Microsoft is scaling back employee access to Anthropic’s Claude Code due to rising AI costs, redirecting engineers to GitHub Copilot CLI. Despite rollback, its Anthropic partnership via Azure remains intact as enterprises face surging token-based expenses from generative AI

New Delhi: US-based technology firm Microsoft has begun scaling back access to Anthropic’s Claude Code among its employees and is redirecting engineers towards GitHub Copilot CLI as surging AI usage drives up enterprise computing costs, according to multiple reports.

Reports said the technology company had earlier expanded access to Claude Code across thousands of employees, including developers, project managers and designers, to encourage experimentation with AI-assisted coding tools.

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However, the rapid adoption of the platform is now said to have significantly increased operational expenses. Despite the rollback, Microsoft’s broader partnership with Anthropic remains intact.

The company continues to maintain its multibillion-dollar Foundry agreement, which includes cloud infrastructure support and access to Claude models through Azure services.

The development comes as several technology companies grapple with the rising costs associated with large-scale deployment of generative AI tools.

In addition, Uber Chief Technology Officer Praveen Neppalli Naga had reportedly said that the company exhausted its entire 2026 budget for AI coding tools within the first four months of the year due to heavy employee usage.

The growing cost burden stems from the token-based pricing structure used by large language models, where companies are charged based on the volume of text processed and generated by AI systems.

Goldman Sachs has estimated that agentic AI systems could drive a massive increase in token usage by 2030 as businesses deploy AI agents at scale across operations.

Research firm Gartner projected that while the cost of running advanced AI models may decline significantly over time, enterprise spending on AI could still rise because newer agentic systems require substantially higher token consumption per task.

Earlier this month, several leading technology firms — including Meta Platforms, Oracle and Cloudflare — announced job cuts and restructuring measures as part of efforts to accelerate their shift towards artificial intelligence.