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Microsoft posts are exposing AI’s real cost problem: Tapping the tech is more expensive than paying human employees

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satya nadella.

Firms today are pushing employees to use as much AI as possible to squeeze out the technology’s productivity gains.

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Summary

Microsoft has reportedly begun canceling most of its direct Claude Code licenses, according to The Verge, instead moving engineers toward using GitHub Copilot CLI. Canceling Claude Code licenses won’t affect Microsoft’s Foundry deal, which includes investing up to $5 billion in Anthropic and giving Foundry customers access to Claude models, as well as Anthropic’s $30 billion commitment to purchase Azure compute capacity, according to The Verge. Microsoft isn’t the only company scaling back its internal AI use. The reports may throw cold water on the bets tech’s biggest firms have placed on the technology. “For my team, the cost of compute is far beyond the costs of the employees,” he said.

Read full article at Fortune Technology →

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