Microsoft’s GitHub faces pressure in AI coding race after outages

When Microsoft paid $7.5 billion for GitHub in 2018, it secured a platform central to modern software development. Today, GitHub has grown to 180 million developers. By scale, it is bigger than ever. In AI-assisted coding, however, it is losing ground.

Repeated outages, a leadership vacuum after former CEO Thomas Dohmke’s departure, a security breach exposing around 3,800 internal code libraries, and rising competition from tools like Cursor and Anthropic’s Claude Code have eroded GitHub’s early advantage. 

For Satya Nadella, the situation reflects Microsoft’s broader struggle to convert its AI lead into dominance.

Since March, GitHub has suffered more than a dozen outages lasting over an hour. The strain traces back to its reliance on older data centre infrastructure rather than fully migrating to Azure. 

Under the surge in AI coding demand, capacity limits have become visible. GitHub now operates across a mix of Amazon, Google, Microsoft, and Oracle cloud systems alongside its own.

GitHub’s technology chief Vlad Fedorov acknowledged the issue, writing, “We have not met our own availability standards.” The impact has been significant. Cisco flagged disruptions internally, while Mitchell Hashimoto wrote that GitHub “is no longer a place for serious work if it just blocks you out for hours per day, every day.” 

Zipline Co-founder Ryan Oksenhorn said his company was “still cleaning up their mess” after a bug reverted code changes.

Leadership instability has compounded the problem. Dohmke has not been replaced, and longtime Microsoft executive Julia Liuson recently announced her retirement. Armin Ronacher summed up the sentiment: “The site has no leadership… It’s a miracle that things are going as well as they are.”

More on this, Cursor has overtaken GitHub Copilot in market share, while Anthropic’s Claude Code and Google’s Gemini Code Assist are gaining traction. Despite launching Copilot early, GitHub has struggled to keep pace.

Now, pricing changes risk further backlash. GitHub is shifting Copilot to usage-based billing, prompting concern among developers. One user, Jeremy Bray, said, “I canceled my GitHub Pro account… which can’t do a whole lot.”

Rivals are seizing the moment. Bill Staples wrote: “Tired of the pain yet? Come to GitLab and take back control of your destiny.”