Microsoft chooses Anthropic over OpenAI's GPT-5 for coding: Company explains why

Microsoft is reportedly updating its Visual Studio Code editor with an automatic AI model selector that prioritises Claude Sonnet 4 over GPT-5 for paid GitHub Copilot users, a report has said.

This signals a strategic shift, with Microsoft effectively admitting it is favouring Anthropic's AI models for coding and development tasks over OpenAI’s – a company in which it invested $13 billion.A guidance was issued before the release of GPT-5, but The Verge cites sources as saying that the company's stance has not changed. The report also notes that Microsoft has been instructing its own developers to use Claude Sonnet 4 for several months.“Based on internal benchmarks, Claude Sonnet 4 is our recommended model for GitHub Copilot,” said Julia Liuson, head of Microsoft’s developer division, in an internal email in June.

Microsoft training its own models

The Verge also reports that beyond its partnership with Anthropic, Microsoft is also making "significant investments" in training its own AI models. At a recent employee town hall, Microsoft AI chief Mustafa Suleyman stated, "MAI-1-preview was only trained on 15,000 H100s, a tiny cluster in the grand scheme of things," hinting at much larger ambitions for proprietary AI.

This shift in preference also extends to other products. The Information reports that the Microsoft 365 Copilot will be “partly powered by Anthropic models” after some of these models reportedly outperformed OpenAI in Excel and PowerPoint.This comes even as Microsoft and OpenAI announced a new deal last week that could pave the way for OpenAI's initial public offering. Moreover, Microsoft's investment in OpenAI could be the biggest bet in tech history, with one report claiming the software giant is set to receive a stake worth $150 billion. The investment is reportedly part of a restructured deal with OpenAI. Microsoft initially invested $1 billion in the company in 2019 and followed up with a multi-billion dollar investment in early 2023. These investments may now return a massive profit.