Microsoft’s GitHub was positioned to win the AI coding race. Outages got in the way

In this article MSFT Follow your favorite stocks CREATE FREE ACCOUNT Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024. Dimas Ardian | Bloomberg | Getty Images Microsoft had all the pieces to win in vibe coding, thanks to the near ubiquity of GitHub, which the company bought for $7.5 billion in 2018. But repeated outages, executive turnover, and the soaring popularity of newer tools like Cursor and Anthropic's Claude Code have eaten away at GitHub's early advantage in generative artificial intelligence, creating another challenge for Microsoft CEO Satya Nadella as he attempts to straighten out his company's AI story. GitHub's reliability challenges in recent months have affected companies as large as Cisco, and have been chronicled by influential names in software development. Mitchell Hashimoto, co-founder of HashiCorp, which IBM acquired last year, wrote in a blog post last month that GitHub "is no longer a place for serious work if it just blocks you out for hours per day, every day." Early Wednesday, GitHub said an employee's device was compromised in a security incident. The attacker was able to obtain about 3,800 of GitHub's own code libraries. Some companies are seeking alternative tools that manage and deploy code. And there are options, whether it's GitLab or offerings from Amazon and Atlassian. Jyoti Bansal, CEO of software delivery startup Harness, said his company has even explored launching a code storage feature. "We are hearing real concerns from enterprise customers, and more of them are actively looking at alternatives," said Bansal. For Nadella, whose 12-year run at the helm of Microsoft is highlighted by a successful pivot to cloud computing, the AI era is proving to be more daunting. With the generative AI boom now well into its fourth year, Microsoft has struggled to carve out a clear lane despite playing a central role early on due to the company's hefty investment in OpenAI and its vibrant cloud infrastructure business. Microsoft, which widely promotes its Copilot technology, has lagged behind internet rivals in creating AI tools and services that resonate with users. That helps explain why its stock price is down 13% this year, trailing all of its megacap peers. Stock Chart Icon Stock chart icon Microsoft vs. the Nasdaq this year With GitHub, Microsoft's mishaps are more pronounced because the service gave the company a distinct homecourt advantage with coders. GitHub has six times more developers than when Microsoft bought the company eight years ago. In the so-called devops market, GitHub is well ahead of GitLab, according to client spending data from startup Ramp, which issues corporate credit cards. And according to Stack Overflow's 2025 developer survey, GitHub is the most popular tool for collaborative work management or code documentation. The software repository market saw a surge in usage with the onset of AI-assisted coding, or vibe coding, as agentic AI allowed developers to ramp up their production. Nadella said in October that GitHub was "growing at the fastest rate in its history, adding a developer every second," to a total of 180 million developers. Later in the year, GitHub started seeing faster growth in the creation of code libraries and the acceptance of code revisions. On the latest earnings call in April, Nadella said, "When it comes to developers, GitHub itself is seeing unprecedented growth, driven by proliferation of agentic coding, and we are hard at work to scale and meet this demand." Too much downtime But under the added pressure, GitHub's infrastructure has sagged. Since March, GitHub has suffered over a dozen incidents lasting more than an hour, according to its status page. "We have not met our own availability standards," Vlad Fedorov, GitHub's technology chief, wrote in a March blog post. At that time, 12.5% of GitHub traffic was going through a region of Microsoft Azure data centers in Iowa, with plans to serve 50% of traffic from Azure by July, he wrote. Instead of relying strictly on Azure, GitHub has for years counted on dedicated data center infrastructure in northern Virginia. With the extra load, GitHub effectively ran out of space, said two people familiar with the issue who asked not to be named in order to discuss internal matters. The Information previously reported on GitHub outages. GitHub leaders have, on multiple occasions, considered moving heavily to Azure, which has data centers across continents, but those plans were shelved, said one of the sources. The other said GitHub has intended to move to Azure, but the migration has taken a very long time. Negotiations with Microsoft around capacity needs have delayed GitHub's Azure adoption, the people said. GitHub former CEO Thomas Dohmke speaks at the Collision conference in Toronto on June 27, 2023. Chloe Ellingson | Bloomberg | Getty Images Meanwhile, there's been turmoil at the top. Thomas Dohmke anno