Microsoft was in a position to win with AI coding. A power outage interfered

microsoft The company had all the ingredients to win at Vibe Coding thanks to the near-ubiquity of GitHub, which it acquired for $7.5 billion in 2018.

But repeated outages, executive changes, and the surge in popularity of new tools like Cursor and Anthropic’s Claude Code have undermined GitHub’s early dominance in generative artificial intelligence, creating new challenges for Microsoft CEO Satya Nadella as he seeks to straighten out his company’s AI story.

GitHub’s reliability challenges in recent months have impacted large enterprises including: Ciscorecords influential names in software development. Mitchell Hashimoto, co-founder of Hashicorp IBM The company, which was acquired last year, wrote in a blog post last month that GitHub is “no longer a place to do serious work if it’s just blocked for hours a day, every day.”

Earlier Wednesday, GitHub announced that an employee’s device had been compromised in a security incident. The attackers were able to obtain approximately 3,800 GitHub proprietary code libraries.

Some companies are looking for alternative tools to manage and deploy code. And whether it is or not, there are options GitLab Offerings from or Amazon and atlassian. Jyoti Bansal, CEO of software distribution startup Harness, said his company is also considering implementing code storage capabilities.

“We are hearing real concerns from our business customers, and many are actively considering alternatives,” Bansal said.

Nadella’s 12 years at the helm of Microsoft have been marked by a successful transition to cloud computing, but the AI ​​era is proving more challenging. As the generative AI boom enters its fourth year, Microsoft has struggled to carve a clear path, despite taking center stage early on with its heavy investments in OpenAI and its vibrant cloud infrastructure business.

Microsoft, which has widely promoted its Copilot technology, has lagged behind its internet rivals in developing AI tools and services that resonate with users. This may help explain why the company’s stock price has fallen 13% this year, lagging all of its mega-cap peers.

In the case of GitHub, Microsoft’s failure is even more pronounced. Because this service gives the company a distinct advantage in programmers’ home court. GitHub has six times as many developers as when Microsoft acquired the company eight years ago.

GitHub significantly outperforms GitLab in the so-called DEVOPS market, according to customer spending data from Ramp, a startup that issues corporate credit cards. GitHub is also the most popular tool for collaboration management and code documentation, according to Stack Overflow’s 2025 Developer Survey.

In the software repository market, usage has skyrocketed with the launch of AI-assisted coding (vibe coding) as agent AI enables developers to enhance production. Nadella said in October that GitHub is “growing at the fastest rate in history, adding developers every second,” reaching a total of 180 million developers. Later this year, GitHub began to see rapid growth in creating code libraries and accepting code revisions.

“In terms of developers, GitHub itself has seen unprecedented growth due to the proliferation of agentic coding, and we’re working hard to scale and meet this demand,” Nadella said during his most recent earnings call in April.

However, under additional pressure, GitHub’s infrastructure degraded. Since March, GitHub has experienced more than 10 incidents lasting more than an hour, according to GitHub’s status page.

“We don’t meet our own availability standards,” Vlad Fedorov, GitHub’s head of technology, said in a March blog post. At the time, 12.5% ​​of GitHub traffic went through the Microsoft Azure data center region in Iowa, and the company plans to serve 50% of its traffic from Azure by July, he wrote.

Rather than relying strictly on Azure, GitHub has long relied on dedicated data center infrastructure in Northern Virginia. The extra load effectively left GitHub running out of space, according to two people familiar with the matter, who requested anonymity to discuss internal matters.

The Information previously reported on GitHub’s outage.

GitHub leaders have repeatedly considered moving to Azure, which has data centers on multiple continents, but those plans have been shelved, one of the people said. Another said GitHub was going to move to Azure, but the move took a very long time. Negotiations with Microsoft over capacity needs have delayed GitHub’s adoption of Azure, according to people familiar with the matter.

Meanwhile, confusion is brewing at the top. Thomas Domke announced in August that he would step down as CEO after about four years at the company. His successor has not yet been decided.

Some GitHub employees started working for Julia Liuson, a 34-year Microsoft veteran who led the company’s development division. Lewson announced his retirement in April.

Earlier this month, Microsoft Xbox head Asha Sharma, who previously worked at GitHub as president of products in the CoreAI engineering group, announced that GitHub vice presidents Tim Allen and Jared Palmer will be joining her division.

GitHub declined to comment.

To deal with the onslaught of usage, administrators looked beyond Azure. Currently, this service relies on Amazon. googleMicrosoft, oracle In addition to maintaining your own facilities, we also manage your cloud infrastructure.

“While we were already moving from a small custom data center to the public cloud, we started working on our multicloud path,” Fedorov wrote in an April blog post. He said GitHub’s top priority is availability and making sure its services are functioning properly.

There were also some embarrassing failures.

Ryan Oxenhorn, co-founder of drone delivery startup Zipline, announced last month in a post on atlassian Bitbucket has provided instructions to restore your changes after GitHub accidentally reverted your code revision. Oxenhorn called this a “terrible, awful bug” and noted that his company was “still cleaning up the mess” after GitHub failed to provide support.

GitHub’s own engineers can use GitHub Copilot as much as they like, but they don’t always fully review the code suggested by the AI ​​agent, one of the sources said. Company policy prohibits employees from merging code without human review, the third person said, as well as another person who requested anonymity to discuss internal matters.

Downtime isn’t the only issue.

“People are now growing more valuable to the platform because they are fed up with the instability, product churn, Copilot AI noise, opaque leadership, and the feeling that the platform is not primarily designed for the community,” Armin Ronacher, developer of the open source Flask software for building web applications, wrote in a blog post. “Obviously, GitHub is also in the middle of an agent coding revolution, and that’s putting a lot of pressure on people over there. But there’s no leadership on this site. It’s a miracle things are going this well.”

Power outages have affected some areas CiscoDJ Sampath, vice president of the company, said they have communicated the issue to customers. Sampath said Cisco has a “failsafe” and runs an enterprise version of GitHub on its own servers.

GitLab CEO Bill Staples is looking to capitalize on GitHub’s challenges.

In a post on X, Staples wrote, “Tired of the pain? Come to GitLab and take back control of your destiny. If you switch from GitHub and sign a new 3-year contract, we’ll give you your first year free.”

Staples didn’t mention GitHub by name, but he told employees in the memo that “platforms that weren’t built for machine scale are beginning to break through on their foundations.”

For GitHub, losing a customer is a particularly inconvenient moment. Few markets are growing as rapidly as AI-assisted coding.

OpenAI announced in April that 4 million people were actively using its Codex coding agent, up from 3 million two weeks earlier. Anthropic’s Claude Code tool has skyrocketed in popularity this year, and is a big reason why the company’s private market valuation recently rose to $900 billion from $380 billion in February.

Cursor continues to see rapid adoption, signing a deal with SpaceX in April that gave Elon Musk’s company the rights to acquire it for $60 billion. According to the company’s data, Cursor overtook GitHub Copilot in market share about a year ago and remains the lead among customers using Ramp.

A March survey of 636 software professionals by engineering analytics startup Jellyfish showed that GitHub Copilot is not as widely used as Claude Code or Google’s Gemini Code Assist. That comes after Nadella announced in January that GitHub Copilot had 4.7 million paid Copilot subscribers, a 75% increase from a year earlier.

GitHub was there first, announcing Copilot in 2021. One of the people said Mr. Fedorov has been discussing internally the need for Copilot to regain leadership. Executives are encouraging employees to adapt to Cursor’s latest features, two people said.

“I think the overall impression is that they were a latecomer, because they were one of the first companies, but then they didn’t grow as quickly as some of the independent companies,” said Tom Murphy, an analyst at technology industry research firm Gartner.

Dohmke, GitHub’s most recent CEO, said in a post on X last month that the company was not investing adequately in AI, noting that more than 90% of employees were “allocated to core products and primitives.”

“Making Copilot a scapegoat for availability issues is not something my predecessor or current leadership would agree with,” he wrote.

GitHub announced in April that it would temporarily no longer accept requests for new individual GitHub Copilot plans starting at $10 per month.

“As Copilot’s agent capabilities rapidly expand, agent workloads increase and more customers are reaching usage limits set to maintain service reliability,” Microsoft Vice President Joe Binder said in a blog post. “Without further action, the quality of service will deteriorate for everyone.”

GitHub wants to make the economics of Copilot more favorable. In June, users will start being charged according to their usage. GitHub is providing a calculator to help customers calculate the new costs, and social media posts suggest that the price of the service is significantly higher. Therefore, some developers may abandon Copilot.

Jeremy Bray, a former senior software developer at FanDuel Sports Network, said he stopped paying for GitHub because its prices went up.

“I canceled my GitHub Pro account, so now I just get a regular free account, but I can’t do much with it,” Bray said.

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