Microsoft Paid $7.5 Billion for This

In 2018, Microsoft bought GitHub for $7.5 billion. At the time, developers were nervous. They had every reason to be.

Nearly eight years later, according to The Verge's Tom Warren — who spoke to current and former GitHub employees — the platform is now "fighting for its survival."

The Collapse Starts at the Top

Last summer, GitHub CEO Thomas Dohmke resigned. That was the beginning of the unraveling.

Microsoft made a decision that looks worse by the day: they did NOT replace him. Instead, GitHub's leadership team was absorbed directly under Microsoft's CoreAI division, headed by Jay Parikh — a former Meta engineering chief that CEO Satya Nadella personally recruited.

According to The Verge's sources, Parikh is not well-liked inside Microsoft. It was his call to leave the CEO position vacant.

Leaving a $7.5 billion acquisition without a CEO is a management failure. You don't expect a company to thrive without leadership.

The Talent Drain Is Real

Dohmke didn't just leave. He's now building a competitor called Entire — a new developer platform. Out of 30 listed employees at Entire, at least 11 are former GitHub employees, according to The Verge.

GitHub employees, who call themselves "Hubbers," reportedly built their identity around independence. Being folded into Microsoft's CoreAI bureaucracy without a CEO to advocate for them has gutted morale.

The Outages Are Driving Away Enterprise Customers

This isn't just internal drama. The infrastructure is cracking under real-world pressure.

GitHub has suffered multiple major outages in recent weeks. Mitchell Hashimoto, co-founder of HashiCorp — which IBM acquired in 2024 — wrote publicly that GitHub "is no longer a place for serious work if it just blocks you out for hours per day, every day."

That quote came from a blog post. It wasn't a private complaint. That's a high-profile developer telling the entire industry: find something else.

Companies as large as Cisco have been affected by GitHub's reliability problems, according to CNBC.

On top of the outages, GitHub disclosed a security breach in which an attacker compromised an employee's device via a "poisoned" VS Code extension and walked off with approximately 3,800 of GitHub's own internal code repositories. The company that hosts the world's code had its own code stolen.

The Business Model Broke

GitHub's pricing model is fundamentally broken, and GitHub's own VP of product admitted it.

Joe Binder wrote in a blog post that agentic coding workflows — where AI agents run autonomously for hours, spawning subagents and parallel processes — are now "routinely consuming more compute than users pay for in a month." His exact words: "It's now common for a handful of requests to incur costs that exceed the plan price."

The result, effective April 20, 2026: GitHub froze new sign-ups for Copilot Pro ($10/month), Pro+ ($39/month), and Student plans. According to The Next Web, Copilot Free is now the ONLY individual plan still accepting new users. No timeline has been given to reopen sign-ups.

Existing Pro and Pro+ users got squeezed too. Usage limits were tightened. The most powerful AI models — Anthropic's Opus line — were stripped from the Pro plan entirely and are now exclusive to Pro+. The message is clear: pay $39/month or get less.

GitHub is also running two separate limit systems simultaneously — premium request caps and session/token limits — that operate independently. A user can have premium requests remaining and STILL hit a wall. According to The Next Web, GitHub is adding usage warnings to VS Code and the Copilot CLI so developers don't get blindsided mid-workflow.

Copilot Lost the AI Coding Race

GitHub Copilot had a massive head start. It was the product that made AI pair programming mainstream.

Then Cursor happened. Then Anthropic's Claude Code happened.

According to CNBC, GitHub Copilot has "fallen behind newer companies like Cursor" in the AI coding market. GitHub's drawn-out migration to Microsoft's Azure has also limited its computing capacity — a structural problem, not a temporary one, per sources cited by CNBC.

Parikh is reportedly worried about Cursor and Claude Code. Concern and action are different things.

Meanwhile, Microsoft Is Burying Annoying AI Buttons

While GitHub burns, Microsoft is also dealing with the fallout from a different Copilot mess: a floating AI button it shoved into Word, Excel, and PowerPoint that hovers over your work and blocks cells in Excel.

Katie Kivett, partner group product manager at Microsoft, admitted to The Verge that the company is "hearing the need for more control over how Copilot appears." Translation: users hated it.

Microsoft is rolling out an update next week that lets users right-click the button and move it back to the ribbon where it belongs. This comes one month after Microsoft also started quietly removing Copilot buttons it had plastered across Windows 11 apps.

After years of forcing AI into every corner of its products, Microsoft is walking it back. A confident company wouldn't need to do that.

What This Means for You

If you're a developer: GitHub's reliability problems are documented and real. Cursor, GitLab, and others are legitimate alternatives worth evaluating now, not after your next outage-induced deadline miss.

If you're an enterprise IT decision-maker: CNBC reports that enterprise customers are "actively looking at alternatives." You're not alone, and the options exist.

If you're a Microsoft shareholder: The stock is down 13% in 2025, trailing every megacap peer, according to CNBC. The AI pivot that was supposed to cement Microsoft's dominance is producing a product that forgets to have a CEO, loses its own source code, and can't keep the lights on.

Nadella bet the company on AI. GitHub was supposed to be the crown jewel of that bet. Right now, it looks like a liability.