Microsoft was positioned to win in AI coding. Outages got in the way
Microsoft was positioned to win in AI coding. Outages got in the way
Publish Date: 2026-05-22 08:00:00
Source Domain: www.cnbc.com
Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.
Dimas Ardian | Bloomberg | Getty Images
Microsoft had all the pieces to win in vibe coding, thanks to the near ubiquity of GitHub, which the company bought for $7.5 billion in 2018.
But repeated outages, executive turnover, and the soaring popularity of newer tools like Cursor and Anthropic’s Claude Code have eaten away at GitHub’s early advantage in generative artificial intelligence, creating another challenge for Microsoft CEO Satya Nadella as he attempts to straighten out his company’s AI story.
GitHub’s reliability challenges in recent months have affected companies as large as Cisco, and have been chronicled by influential names in software development. Mitchell Hashimoto, co-founder of HashiCorp, which IBM acquired last year, wrote in a blog post last month that GitHub “is no longer a place for serious work if it just blocks you out for hours per day, every day.”
Early Wednesday, GitHub said an employee’s device was compromised in a security incident. The attacker was able to obtain about 3,800 of GitHub’s own code libraries.
Some companies are seeking alternative tools that manage and deploy code. And there are options, whether it’s GitLab or offerings from Amazon and Atlassian. Jyoti Bansal, CEO of software delivery startup Harness, said his company has even explored launching a code storage feature.
“We are hearing real concerns from enterprise customers, and more of them are actively looking at alternatives,” said Bansal.
For Nadella, whose 12-year run at the helm of Microsoft is highlighted by a successful pivot to cloud computing, the AI era is proving to be more daunting. With the generative AI boom now well into its fourth year, Microsoft has struggled to carve out a clear lane despite playing a central role early on due to the company’s hefty investment in OpenAI and its vibrant cloud infrastructure business….
