Microsoft\u2019s CoreAI team, the new AI engineering group led by former Meta engineering chief Jay Parikh, has been testing Claude Code in recent months, and last week Microsoft\u2019s Experiences + Devices division were being asked to install Claude Code. This division is responsible for Windows, Microsoft 365, Outlook, Microsoft Teams, Bing, Edge, Surface, and more.<\/p>\n
Even employees without any coding experience are being encouraged to experiment with Claude Code, to allow designers and project managers to prototype ideas. Microsoft has also approved the use of Claude Code across all of its code and repositories for its Business and Industry Copilot teams.<\/p>\n
Software engineers at Microsoft are now expected to use both Claude Code and GitHub Copilot and give feedback comparing the two, I\u2019m told. Microsoft sells GitHub Copilot as its AI coding tool of choice to its customers, but if these broad internal pilot programs are successful, then it\u2019s possible the company could even eventually sell Claude Code directly to its cloud customers.<\/p>\n
Microsoft is now one of Anthropic\u2019s top customers, according to a recent report from The Information<\/a>. The software maker is also counting selling Anthropic AI models toward Azure sales quotas, which is unusual given Microsoft typically only offers its salespeople incentives for homegrown products or models from OpenAI.<\/p>\n Microsoft\u2019s decision to adopt Claude Code more broadly among its engineering teams certainly looks like a vote of confidence in Anthropic\u2019s AI tools over its own, especially as it\u2019s encouraging nontechnical employees to try out coding. But the reality is that Microsoft\u2019s developers are likely to use a mix of AI tools, and adopting Claude Code is another part of that tool set.<\/p>\n \u201cCompanies regularly test and trial competing products to gain a better understanding of the market landscape,\u201d says Frank Shaw, Microsoft\u2019s communications chief, in a statement to Notepad. \u201cOpenAI continues to be our primary partner and model provider on frontier models, and we remain committed to our long-term partnership.\u201d<\/p>\n While Microsoft remains committed to OpenAI, it is increasingly working with Anthropic to bring its models and tools to Microsoft\u2019s own teams and the software it sells to customers. Microsoft and Anthropic signed a deal<\/a> in November that allows Microsoft Foundry customers to get access to Claude Sonnet 4.5, Claude Opus 4.1, and Claude Haiku 4.5. The deal also involves Anthropic committing to purchasing $30 billion of Azure compute capacity.<\/p>\n Microsoft has also started favoring Anthropic\u2019s Claude models inside Microsoft 365 apps and Copilot<\/a> recently, using them in specific apps<\/a> or features where Anthropic\u2019s models have proved more capable than OpenAI\u2019s counterparts.<\/p>\n The big question here is, what does the increased use of Claude Code at Microsoft mean for its more than 100,000 code repositories? Microsoft told me last year that 91 percent of its engineering teams use GitHub Copilot<\/a> and a variety of teams have been using the AI tool to speed up mundane tasks. Microsoft\u2019s use of AI tools has been largely restricted to software engineers, but with Claude Code and Claude Cowork<\/a>, Anthropic is increasingly focused on making coding and non-coding tasks more approachable, thanks to AI agent capabilities.<\/p>\n Microsoft is embracing the ease of use of Claude Code to allow more nontechnical employees to commit code using AI, and this broad pilot will certainly highlight the challenges and benefits of that shift. It also puts further pressure on junior developer roles, with fears in the industry that these roles are increasingly disappearing because of AI. Microsoft just took another big step toward a future where more autonomous AI agents are creating code, further wrestling control from its software engineers.<\/p>\n Microsoft is getting ready to show off two of its biggest Xbox games this year, Forza Horizon 6 and Fable, later today as part of its Xbox Developer Direct stream<\/a>. There will also be a first in-depth look at Beast of Reincarnation and at least one other game shown, I\u2019m hearing. Double Fine is ready to show off Kiln<\/a>, a multiplayer, team-based brawler. I understand Double Fine has been holding playtests recently, where you play as a spirit that can inhabit pottery and carry water to douse an opponent\u2019s kiln and put out a fire.<\/p>\n I wouldn\u2019t be surprised to see Kiln appear as an early preview in the coming months, followed by Forza Horizon 6 in May and then Halo: Campaign Evolved. I keep hearing that both Fable and Gears of War: E-Day are currently targeting a release in the second half of this year. Microsoft is keen to release new Forza, Gears, Halo, and Fable games in 2026 to mark 25 years of Xbox.<\/p>\n Microsoft\u2019s first Windows 11 update of 2026 stopped some computers from shutting down. It\u2019s only January and Microsoft has had to rush out an emergency out-of-band fix that stopped some Windows 11 PCs from shutting down. The issues<\/a> were limited to machines running Enterprise and IoT editions of Windows 11 version 23H2, but it\u2019s yet another buggy update for Windows, which is becoming increasingly common.Microsoft\u2019s free Xbox Cloud Gaming is coming soon with ads. Microsoft is getting closer to launching its free streaming option for Xbox Cloud Gaming. The ad-supported feature has started appearing<\/a> inside the Xbox app for PC, indicating \u201c1 hour of ad-supported playtime per session.\u201d I\u2019m expecting to see this rollout with preroll ads in the coming weeks, but there could be limits of up to five hours free per month.Microsoft wants to build 15 data centers in Mount Pleasant, Wisconsin. The empty land formerly owned by Foxconn is about to be transformed into Microsoft data centers<\/a>. Leaders of the local village in Mount Pleasant, Wisconsin, approved plans for the data centers earlier this week, and final approval could come next week. Foxconn\u2019s failed Wisconsin project had promised 13,000 jobs, but now the land will be filled with a 1.2-million-square-foot data center project that will hold hundreds of thousands of Nvidia\u2019s AI GPUs.The Xbox app is now available for all Arm-based Windows 11 PCs. After a rocky start to gaming on Windows on Arm, Microsoft has updated its Xbox app<\/a> this week so it\u2019s fully compatible with all Qualcomm-powered devices. More than 85 percent of the Xbox Game Pass catalog is also now compatible with Arm-based devices, but the majority of games will still need to be emulated using Microsoft\u2019s Prism technology.Microsoft Paint now has an AI-powered coloring book. Microsoft is adding more AI features to its Paint app this week. Windows testers can now try out a coloring book feature<\/a> that lets you create coloring book pages from a text prompt. It\u2019s available inside the Copilot button in Paint, and you have to have a Copilot Plus PC to be able to use it. Notepad (the app!) is also getting expanded Markdown syntax features and a new welcome experience to highlight features. I never thought I\u2019d see the day that Notepad, a lightweight app, would need a welcome screen because of all the features Microsoft has packed in.GitHub has a new Copilot SDK. Microsoft is announcing a technical preview of its GitHub Copilot SDK<\/a> today, which brings the power of the GitHub Copilot CLI to any app. It essentially allows developers to bring GitHub Copilot capabilities as a programmable SDK for Python, TypeScript, Go, and .NET. Microsoft teams have already used this to build custom GUIs for agents, summarizing tools, YouTube chapter generators, and more.Satya Nadella and former British Prime Minister Rishi Sunak chat AI. Former UK leader Rishi Sunak took on a senior adviser role at Microsoft and Anthropic last year, and he\u2019s now appeared alongside Microsoft CEO Satya Nadella to discuss the future of AI. The roughly 30-minute talk<\/a> didn\u2019t have any surprising news, but Sunak did agree with Nvidia CEO Jensen Huang that \u201cyou may not lose your job to AI, but you may well lose your job to someone using AI.\u201d Nadella thinks AI will make us all \u201cmanagers of infinite minds,\u201d much like how we have \u201cinformation at your fingertips.\u201dMicrosoft now sponsors the Mercedes-AMG F1 team. Microsoft is switching its F1 allegiances from Alpine to Mercedes-AMG for the 2026 season. A new multiyear partnership<\/a> will see Mercedes-AMG use Microsoft technologies for race team operations and plaster the Microsoft logo in prominent positions on the 2026 Mercedes-AMG F1 car and on racing suits. There\u2019s a big technical shake-up for the 2026 season, with all-new chassis, power units, and fuel regulations.<\/p>\n I\u2019m always keen to hear from readers, so please drop a comment here, or you can reach me at notepad@theverge.com<\/a> if you want to discuss anything else. If you\u2019ve heard about any of Microsoft\u2019s secret projects, you can reach me via email at notepad@theverge.com<\/a> or speak to me confidentially on the Signal messaging app, where I\u2019m tomwarren.01<\/a>. 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