Is Microsoft Losing Its Edge Again?
▼ Summary
– Microsoft CEO Satya Nadella’s Build conference keynote focused on agentic AI, but the company faces challenges including a declining stock price and low uptake of its Copilot products.
– Anthropic has taken the lead in agentic coding tools, prompting Microsoft to end Claude Code licenses and force developers to use its own Copilot.
– GitHub, a Microsoft subsidiary, has experienced unprecedented downtimes, leading to developer complaints and defections, posing a risk to the company’s relationship with the coding community.
– Microsoft VP Scott Hanselman, who nearly left the company, helped bring the open-source agentic coding tool OpenClaw into Microsoft and demonstrated new “copilots” at the conference.
– Hanselman attributes GitHub’s outages to a surge in bot traffic, describing it as a temporary “hiccup” rather than a sign of complacency.
This week, Satya Nadella took the stage at Microsoft’s annual Build developer conference in San Francisco, delivering the usual mix of product hype and rosy AI predictions. His keynote fixated on how the company is going all-in on agentic AI. But beneath the enthusiasm at Fort Mason, a cloud lingered , and it had nothing to do with Azure.
While competitors have seen their valuations and stock prices soar, Microsoft’s shares have actually dipped this year. Its workplace AI tools, nearly all branded as Copilot, have struggled to gain traction. And though Microsoft once led the pack in coding tools, Anthropic has surged ahead with a groundbreaking agentic approach to coding. In response, Microsoft reportedly pulled Claude Code licenses, forcing its own developers to rely on Copilot instead.
Adding fuel to the fire, GitHub , the essential code repository and Microsoft subsidiary , has suffered unprecedented outages, sparking complaints and even defections among longtime users. One Reddit post bluntly asked: “Has GitHub become a dumpster fire?” For Microsoft, losing the loyalty of the coding community would be nothing short of a catastrophe. As former CEO Steve Ballmer famously chanted: Developers! Developers! Developers!
Enter Scott Hanselman, a Microsoft VP and GitHub technical staffer who has spent years talking to developers, training engineers, and evangelizing both GitHub and AI. He now finds himself at the center of Microsoft’s belated push to capture the agentic moment. Late last year, Hanselman nearly quit after 18 years to teach high school science. But by November, he was electrified by the agentic coding revolution sparked by Claude Code and OpenClaw. He helped bring OpenClaw, an open-source project, into Microsoft. At Build, he joined Nadella’s keynote, demonstrating how Copilots could automate tasks for coders and workers alike.
Hanselman seemed the perfect person to explain what’s really going on inside Microsoft. After bursting out of the gate three years ago as a leader in generative AI, has the company lost its edge? Here’s what he had to say.
Steven Levy: GitHub users have been complaining about frequent downtimes. Some have left. What’s going on?
Scott Hanselman: Remember when social media got flooded by bots, or 20 years ago when email got flooded by spam? The incoming traffic to GitHub , and its usage , is now as many bots as people. I think GitHub is doing a great job scaling to meet that need, but the bots are very fast. This is just a hiccup moment.
How are you convincing developers this is a hiccup, not a sign of complacency?
It’s easy to say it’s down at this moment, but people forget it’s up 99 percent of the time. It’s just under tremendous pressure from the bots.
Microsoft’s biggest Build announcement was about agents and its OpenClaw adoption, through a product called Scout. You helped make that happen and brought OpenClaw founder Peter Steinberger into the process.
It’s one of those things that happens when open-source people talk. Last year, OpenClaw started everything. I made a little Windows app, Satya thought it was exciting, and I started talking to folks. Microsoft had been thinking about agents on Windows for a very long time, and I just thought, “This is a great opportunity for us , why not go for it?”
(Source: Wired)
