Microsoft AI chief calls Anthropic models too expensive

Microsoft AI Chief Says Anthropic Models Too Expensive as Company Pulls Back From Claude

Microsoft AI CEO Mustafa Suleyman has publicly stated that Anthropic’s Claude models are too expensive at enterprise scale, according to Bloomberg, as the company accelerates its push to build in-house AI alternatives and reduce its dependence on outside model providers.bloomberg

Internal Cost Crackdown

The comments come as Microsoft moves to cancel Claude Code licenses across its Experiences and Devices division — the group responsible for Windows, Microsoft 365, Outlook, Teams, and Surface — by June 30, the end of its fiscal year. The Verge first reported in mid-May that the company was redirecting thousands of engineers, product managers, and designers to GitHub Copilot CLI.theverge

Microsoft’s stated rationale is “toolchain unification,” but reporting from Windows Central and The Next Web attributes the move to cost overruns tied to token-based billing. The fiscal year-end deadline makes the license cancellation a straightforward way to cut operating costs before a new budget cycle begins in July.windowscentral

The real-world costs of enterprise AI coding tools have proven difficult to contain. Per-engineer spending on Claude Code has ranged from $500 to $2,000 per month depending on usage intensity. Uber provided the most dramatic example of this dynamic: the company’s CTO, Praveen Neppalli Naga, told The Information in April that the ride-hailing giant had exhausted its entire 2026 AI budget within four months after Claude Code adoption among its 5,000 engineers surged from 32% to 84%.linkedin

Microsoft’s Dual Strategy

Microsoft’s relationship with Anthropic remains complex. Even as it cancels internal Claude Code licenses, the company continues to sell Anthropic’s technology to enterprise customers. In March, Microsoft launched Copilot Cowork — built using Anthropic’s Claude models and agentic architecture — as a centerpiece of its Microsoft 365 Copilot Wave 3 update. The product is available through the new Microsoft 365 E7 Frontier Worker Suite at $99 per user per month, a 65% premium over the E5 tier at $60.fortune

At the Build developer conference this week, Suleyman unveiled seven new in-house MAI models, including MAI-Thinking-1, a reasoning model he said matches Claude Opus 4.6 on coding benchmarks. A new MAI-Code-1-Flash model, tuned specifically for GitHub Copilot CLI, began rolling out inside VS Code immediately. In a Bloomberg interview earlier this year, Suleyman said Microsoft aims to reach “state-of-the-art” across its own model family by 2027.gizmodo

The Enterprise AI Cost Reckoning

The episode marks what The Next Web described as “the end of the experimental phase” — the period in which large software companies absorbed arbitrary token costs in exchange for learning how AI coding tools perform at scale. Claude models remain available to Microsoft employees through Copilot CLI alongside Microsoft’s own models and OpenAI’s offerings, but the era of uncapped standalone licenses appears over.thenextweb