Microsoft CEO Satya Nadella brushed off concerns about losing coding assistant market share to upstart competitors, calling the emergence of new rivals like Cursor and Claude Code a positive sign for the industry rather than an existential threat. Speaking on the Dwarkesh Podcast during a tour of Microsoft’s new Fairwater 2 datacenter, Nadella responded to data showing GitHub Copilot’s market share declining from nearly 100% to around 25% in just one year. “I love this chart for so many reasons. One is we’re still on the top,” he said, noting that competitors like Cursor, Anthropic’s Claude Code, and OpenAI’s Codex have collectively grown the AI coding market from $500 million to $5-6 billion in annual revenue.
GitHub pivots to platform strategy as competition intensifies
Rather than fighting to maintain dominance in coding assistants, Microsoft is repositioning GitHub as a platform for all AI coding agents. The company announced at its GitHub Universe conference that its new Agent HQ interface will allow outside coding assistants, including OpenAI’s Codex and Anthropic’s Claude Code, to plug into the GitHub ecosystem.”When you say, who’s it now? Claude’s going to kill you, Cursor is going to kill you, it’s not Borland. Thank God,” Nadella said, referencing the defunct 1990s software company. “That means we are in the right direction.”The strategy reflects a calculated bet that GitHub’s 180 million developer user base and role as the central repository for code gives Microsoft structural advantages even as individual tools compete. Jay Parikh, who oversees GitHub as Microsoft’s executive vice president of CoreAI, told The Verge the company needs an “arms-wide-open ecosystem” approach.
CEO Nadella says market expansion matters more than market share
Nadella emphasized that the rapid growth of the overall AI coding category matters more than Microsoft’s shrinking slice of it. “The fact that we went from nothing to this scale is the market expansion,” he said, comparing it to the cloud computing transition that ultimately grew Microsoft’s business despite lower margins than the previous server-based model.The CEO noted that GitHub continues to benefit regardless of which coding tool wins, as repositories, pull requests, and developer sign-ups have reached all-time highs. “Guess where all the repos of all these other guys who are generating lots and lots of code go? They go to GitHub,” Nadella said on the podcast, adding that one developer joins GitHub every second.