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Microsoft starts canceling Claude Code licenses

theverge.com

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Re: Microsoft starts canceling Claude Code licenses

#51

Post by thewebguyd »

robertkarl wrote: post #2

Cancellation effective June 30. This was a _pilot_ launched in December that accidentally consumed their 2026 yearly target spend on AI! I expect the r/LocalLLaMA guys to be going nuts about this news.

From the article

> It was part of an effort to get project managers, designers, and other employees to experiment with coding for the first time.

I suspect they weren't as efficient as they could be with token use either. Sounds like they were trying to encourage non-developers to vibe code stuff

Re: Microsoft starts canceling Claude Code licenses

#52

Post by BoiledCabbage »

ndiddy wrote: post #3

This is an AI generated summary of a blog post ( https://www.thelowdownblog.com/2026/05/microsoft-cancels-int... ) which is a summary of an AI generated article ( https://blazetrends.com/microsoft-cancels-claude-code-pilot-... ) which is a summary of another AI generated article ( https://www.themodelwire.com/article/microsoft-starts-cancel... ) which is a summary of an article from The Verge ( https://www.theverge.c…

Man, maybe it's time for me to give the verge a subscription. There the only ones actually doing any journalism here and a bunch of AI blogs skimming off the top.

Re: Microsoft starts canceling Claude Code licenses

#53

Post by jayd16 »

thewebguyd wrote: post #50
rnxrx wrote: post #35

Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?

I suspect AI would have to get drastically more expensive before it starts looking worse than payroll. If one developer using Claude Code can effectively substitute for 2 developers, you are already coming out ahead at current API pricing assuming very heavy usage, your cost is going to be ~1.5x developer (factoring in beyond salary - benefits, PTO, the other overhead that comes with having employees). So you're gett…

You're starting from the assumption that its a 2x benefit. That's a massive leap.

Re: Microsoft starts canceling Claude Code licenses

#54

Post by gobdovan »

brookst wrote: post #45
tra3 wrote: post #5

There's definitely a way to use Claude code that is token conscious. I've tried throwing unsupervised agentic software factory workflows against the wall, and they burned through my tokens like nobody's business but didn't produce much. Supervised, human-in-the-loop process on the other hand is much more productive but doesn't consume nearly as much. Maybe that's why everyone's pushing agentic approaches so much.

I get 98.6% cache hits on Claude code. Short of drastic arch changes it’s hard to imagine it getting much better.

98.6% cache hits doesn't distinguish an efficient workflow from an overly chatty linear agent repeatedly reusing the same context. Plus, it says nothing directly that the process has good useful progress per token.

Re: Microsoft starts canceling Claude Code licenses

#56

Post by stock_toaster »

ares623 wrote: post #47
rnxrx wrote: post #35

Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?

There is no profit, expense, revenue. Those don't matter. Only thing that matters is stock price goes up, and laying off makes stock price go up. When laying off make stock price go down, then laying off stop.

I imagine layoffs are also very much "this quarter and next quarter" with regards to investor visibility.

While LLM Opex is "some future quarter" and very easy to co-mingle with other expenses.

Re: Microsoft starts canceling Claude Code licenses

#57

Post by HDThoreaun »

lawn wrote: post #43
kristjansson wrote: post #31

Earlier quoted context omitted.

I suspect subscription limits are quite a bit higher than the equivalent tokens their dollar cost could purchase. I similarly feel like I can get a lot done with a $20/mo Claude Pro subscriptions, but also can easily spend $10-20/day at API pricing with similar usage.

I don't understand why people are using the API pricing instead of the Pro/Max subscriptions? What am I missing?

Anthropic is forcing large enterprises onto api billing instead of subscriptions.

Re: Microsoft starts canceling Claude Code licenses

#58

Post by dividedbyzero »

rnxrx wrote: post #35

Thus does kind of beg the question: If developers are being laid off because AI is better/faster/cheaper or makes all their people 10x or whatever fig leaf, what happens if the required tooling ends up being more expensive? From the investor’s point of view is the drag of employee costs better or worse than a ballooning expense item?

I suppose if it all works out it'll end up way more expensive than the employees the models displaced ever were. These kinds of technologies usually end up as an oligopoly at best, and those players will have a wide moat by then, and the things these models build will be tweaked such that no other model or human being can realistically work on them anymore, and then they can price gouge everyone to the brink of unprofitability.

Re: Microsoft starts canceling Claude Code licenses

#59

Post by xienze »

layer8 wrote: post #44
SubiculumCode wrote: post #13

Earlier quoted context omitted.

At the enterprise level though, its going to be hard to want to use a service in which costs are not predictable, and keeping those costs under control requires employee training.

To be fair, the cost of software development has always been fairly unpredictable. What may be different is that the cost used to be roughly proportional to man-hours spent, while now the number of agents running in parallel may be less predictable.

> To be fair, the cost of software development has always been fairly unpredictable.

Yes, but in a "oops this is gonna take another two months to finish" kind of way, not the "oops this is the 12th time this month 8 developers have burned $2K in tokens in a single day and no one really knows how it happened" kind of way.

Re: Microsoft starts canceling Claude Code licenses

#60

Post by HDThoreaun »

uniclaude wrote: post #23

That's very interesting to reconcile with the fact that not too far, Amazon employees feel incentivized to use as many tokens as possible.

"incentivize to use as many tokens as possible" = "Upper management knows people dont like change so we are forcing them to come up with ways to use this thing". It does not mean that management will encourage wastefulness in the future, and it also doesnt mean that token usage from now wont be reviewed in the future. Whats to stop them from dinging your performance in november because you wasted a hundred thousand on tokens with nothing to show for it?
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