Microsoft cuts Claude spending by more than a third as token bills pile up

Microsoft has reduced its spending on Anthropic’s Claude models by more than one-third. The reason is not a falling out. It is the bill. The company rolled out Claude Code to thousands of its engineers, watched usage take off, and then watched token costs climb far faster than anyone had budgeted for. Now most of those licenses are gone. Microsoft is pointing employees toward its own tools instead. From rollout to rollback in six months The deployment began in December 2025 inside Microsoft’s Experiences & Devices division. Thousands of engineers got access to Claude Code, Anthropic’s AI coding assistant. Adoption spread organically and quickly. Token consumption doubled in the first few months, according to the research findings. Per-engineer token costs for Claude Code ranged between $500 and $2,000 each month. By May 2026, Microsoft had canceled the majority of its internal Claude Code licenses. Employees are being redirected to GitHub Copilot CLI, the command-line version of Microsoft’s own coding assistant. The switch is not optional. A full transition is mandated by June 30, 2026, which lands just before the close of Microsoft’s fiscal year. Why Microsoft is going in-hous...