GitHub loses independence as Microsoft absorbs developer platform into CoreAI

GitHub, the world's largest code repository platform, lost its operational independence in August 2025 when Microsoft announced the developer service would be absorbed into its CoreAI division. Thomas Dohmke, who served as GitHub's chief executive officer since November 2021, resigned as part of the restructuring. His transition period concluded at the end of 2025.

The integration marks a fundamental shift in Microsoft's approach to the platform it acquired for $7.5 billion in 2018. When the acquisition closed, Microsoft executives promised GitHub would remain an independent company, operating separately from Redmond's corporate structure. That pledge lasted seven years.

Jay Parikh, executive vice president of Microsoft CoreAI, now oversees GitHub alongside the company's broader artificial intelligence infrastructure. The reorganization positions GitHub as a component of Microsoft's AI development pipeline rather than an autonomous business unit serving the global developer community.

From independence to integration

Microsoft's original acquisition pitch emphasized autonomy. Satya Nadella personally assured developers that GitHub would "retain its developer-first ethos, operate independently and remain an open platform." The company appointed Nat Friedman, a well-regarded entrepreneur from the developer tools community, as CEO to signal continuity rather than corporate absorption.

Under Friedman and later Dohmke, GitHub grew substantially. The platform's annual recurring revenue expanded from approximately $200 million in 2017 to $2 billion by July 2024. Developer accounts proliferated, reaching over 180 million by late 2025. The Fortune 100 adoption rate for GitHub Copilot, the platform's AI coding assistant, reached 90 percent.

These metrics suggested success. The integration announcement, however, revealed that Microsoft views GitHub's future differently than its past.

CoreAI represents Microsoft's concentrated bet on artificial intelligence domination. The division controls Azure AI infrastructure, model development partnerships, and now the largest repository of open source code on the planet. Absorbing GitHub gives CoreAI direct access to training data, developer workflows, and distribution channels for AI coding tools.

Dohmke's final months promoting AI strategy

Just two months before his resignation became public, Dohmke appeared on The MAD Podcast in June 2025, enthusiastically discussing GitHub's artificial intelligence trajectory. The interview, recorded without any indication of impending departure, presented a CEO confident about his platform's direction.

According to Dohmke during the podcast, GitHub Copilot had reached 20 million users with enterprise customers increasing 75 percent quarter over quarter. The executive described a multi-model approach where GitHub offered developers access to AI systems from OpenAI, Anthropic, and Google rather than limiting options to a single provider.

"We want developers to have choice," Dohmke explained, positioning GitHub as a neutral platform connecting developers with whatever AI assistance best suited their needs. This philosophy of platform independence contrasted sharply with the integration announcement that would follow weeks later.

Dohmke also addressed competitive threats during the podcast. When asked about Cursor, the AI-native code editor that had achieved a valuation approaching $10 billion and roughly $500 million in annual recurring revenue, he acknowledged the challenge while expressing confidence in GitHub's positioning.

The timing raises questions. Did Dohmke know his departure was imminent when he recorded that optimistic interview? The podcast presented a CEO building for the long term, not one preparing to exit.

Microsoft's AI product struggles provide context

GitHub's absorption into CoreAI occurred during a period of significant turmoil for Microsoft's artificial intelligence initiatives. Internal communications obtained by The Information in December 2025 revealed that Nadella had told engineering managers that Copilot integrations with Gmail and Outlook "don't really work" for the most part and are "not smart."

The frank criticism came from a CEO who had delegated business operations to focus personally on fixing AI products. In September 2025, Nadella announced he would hand off many responsibilities to Judson Althoff, who received the title "Commercial CEO," specifically to concentrate on AI development problems.

Microsoft's internal Copilot struggles extended beyond email integration failures. Carnegie Mellon University researchers documented that AI agents fail to complete real-world office tasks 70 percent of the time. Gartner predicted in June 2025 that over 40 percent of agentic AI projects would be canceled by end of 2027 due to escalating costs, unclear business value, and inadequate risk controls.

These findings complicated Microsoft's public messaging about AI transformation. While earnings calls celebrated metrics like 100 million monthly active users across Copilot applications and advertising revenue exceeding $20 billion annually, internal reality suggested fundamental functionality problems remained unsolved.

The GitHub integration fits within this troubled context. By consolidating the developer platform under CoreAI leadership, Microsoft gains tighter control over one of its most successful AI products—GitHub Copilot—while potentially using GitHub's codebase and user behavior data to address problems elsewhere in the AI portfolio.

Competitive pressure intensified throughout 2025

GitHub Copilot pioneered AI-assisted coding when it launched in 2021, built on OpenAI's Codex model. The head start produced impressive adoption numbers. Yet by 2025, competitors had closed the gap and in some cases surged ahead.

Cursor emerged as the most prominent challenger. The startup's AI-native development environment attracted developers frustrated with GitHub Copilot's integration into existing editors. Cursor's valuation reportedly reached between $9 billion and $10 billion, reflecting investor confidence that the AI coding market could support multiple major players.

The competitive dynamics accelerated throughout the year. Microsoft deployed GPT-5 across its platforms in August 2025, including GitHub Copilot, promising enhanced coding capabilities. Nadella described the deployment as bringing "powerful new advances in reasoning, coding, and chat" to developers.

Elon Musk responded to the GPT-5 announcement with a stark prediction: "OpenAI is going to eat Microsoft alive." The comment, posted on social media platform X, accumulated 834,300 views and sparked debate about whether Microsoft's dependence on OpenAI models created strategic vulnerability rather than competitive advantage.

Evidence emerged later in 2025 that OpenAI had quietly moved away from Microsoft's Bing search infrastructure for ChatGPT operations. The shift undermined a key component of the partnership that Microsoft had promoted since 2023, suggesting Musk's warning about relationship dynamics carried substance.

Expert developers expressed skepticism about AI coding tools more broadly. Research published in January 2026 found experienced programmers maintained strict control over AI agents rather than trusting autonomous code generation. The study documented that 67 survey respondents prioritized software quality attributes when working with AI assistance, with correctness and readability mentioned most frequently.

One developer captured the consensus among experienced professionals: "I like coding alongside agents. Not vibe coding. But working with." The sentiment suggested AI coding tools had not achieved the autonomous capability that venture capital valuations implied.

Community reaction revealed deep skepticism

GitHub's user community greeted the integration announcement with predictable concern. The Hacker News discussion thread accumulated over 1,100 comments, with many users invoking Microsoft's historical pattern of "Embrace, Extend, Extinguish"—a phrase describing how the company allegedly absorbed competing technologies before eliminating them.

Commenters cited previous Microsoft acquisitions that followed similar trajectories. Xamarin, the mobile development platform acquired in 2016, was repeatedly referenced as an example of a once-independent technology slowly absorbed into Microsoft's corporate structure until its distinct identity disappeared. Skype, acquired in 2011, faced similar criticism.

Technical complaints accompanied strategic concerns. Users noted that GitHub still lacked IPv6 support years after acquisition, a basic networking feature that many considered overdue. Others documented declining quality in GitHub Actions, the platform's continuous integration service, suggesting engineering resources were being redirected away from infrastructure maintenance.

Reddit discussions on the technology and programming forums reflected similar sentiment. Some users announced migration plans to GitLab, Forgejo, or Codeberg—alternative code hosting platforms that remained independent. The viability of such migrations remained uncertain given GitHub's network effects and enterprise adoption, but the discussions signaled eroding trust.

Social media posts documented user reports of GitHub access issues during the transition period. Whether these problems resulted from the reorganization or coincidental technical difficulties remained unclear, but affected users attributed blame to the Microsoft integration.

Microsoft's broader AI strategy raises transparency concerns

The GitHub reorganization occurred alongside Microsoft's closure of its Xandr demand-side platform, effective February 28, 2026. Microsoft announced the discontinuation in May 2025, citing incompatibility between traditional programmatic advertising models and the company's vision for "conversational, personalized, and agentic advertising futures."

Xandr, originally AppNexus before Microsoft's 2018 acquisition, had championed transparency in advertising technology. The platform provided advertisers visibility into fee structures and supply chain costs. Eliminating Xandr removes this transparency option from the market precisely as Microsoft pushes advertisers toward AI-driven solutions offering less visibility into how advertising dollars are spent.

The pattern extends to GitHub. An independent GitHub served developers as a neutral platform with clear governance and predictable behavior. A GitHub absorbed into CoreAI serves Microsoft's AI strategy, with developer interests potentially subordinated to corporate priorities around model training, data collection, and competitive positioning.

Australian regulators provided additional context for Microsoft's AI approach. The Australian Competition and Consumer Commission initiated Federal Court proceedings in October 2025 alleging Microsoft misled approximately 2.7 million Australian customers about subscription options following Copilot integration into Microsoft 365 plans. The regulator claimed Microsoft deliberately concealed alternative subscription tiers to push consumers toward more expensive AI-integrated offerings.

Whether Microsoft's approach to GitHub will follow similar patterns remains speculative. However, the combination of Xandr closure, alleged Copilot marketing deception, and GitHub absorption into CoreAI suggests a company prioritizing AI platform control over transparency and customer choice.

Financial performance versus product reality

Microsoft's fiscal year 2025 results, announced in July 2025, presented impressive headline numbers. Search and news advertising revenue grew 21 percent to reach $13.9 billion for the full year. GitHub Copilot continued expanding, with the platform adding developers at a rate of one per second and reaching over 180 million total developers.

The earnings call transcript revealed GitHub Copilot had grown to over 26 million users by October 2025, up from the 20 million Dohmke cited in his June podcast interview. Azure AI Foundry reported 80,000 customers, including 80 percent of the Fortune 500.

Yet these metrics coexisted with internal acknowledgment that core AI products failed basic functionality tests. Nadella's admission that Copilot integrations "don't really work" came after Microsoft reported over 100 million monthly active users across its Copilot applications. The disconnect between adoption statistics and product quality suggested metrics might measure curiosity or corporate mandates rather than genuine user satisfaction.

At Build 2025 in May, Microsoft announced it generates 30 percent of all new code through AI assistance, representing what Nadella called a critical threshold in the transition away from human-driven development. Chief Technology Officer Kevin Scott indicated expectations for 95 percent AI-generated code by 2030.

The ambitious projections contrasted with November 2025 news that Windows 11 had experienced widespread system failures since July 2025. Components including the Start Menu, Taskbar, File Explorer, and System Settings malfunctioned for months before Microsoft officially acknowledged the problems. Social media filled with commentary from software engineers questioning whether Microsoft's AI code generation strategy had contributed to the operating system instability.

The agentic web vision

Microsoft executives described their strategic direction as building an "agentic web"—autonomous AI systems that operate independently across applications and data sources rather than responding to individual user queries. At Build 2025, Nadella outlined a future where human web browsing becomes obsolete, replaced by AI agents accessing data directly.

GitHub plays a central role in this vision. The platform's code repositories provide training data for AI models. Its developer community offers distribution for AI coding tools. Its workflows generate behavioral data about how software gets created. Under CoreAI control, these assets serve the agentic web strategy rather than existing independently.

Parikh, the CoreAI executive vice president now overseeing GitHub, has described building an "agent factory"—infrastructure for creating and deploying autonomous AI systems at scale. GitHub integration presumably accelerates this factory by providing raw materials in the form of code, context, and developer attention.

The advertising industry's own experience with agentic AI offers cautionary lessons. IAB Tech Lab released a comprehensive agentic roadmap in January 2026 specifically to prevent ecosystem fragmentation as competing protocols emerge. The organization warned that platform-specific implementations could splinter the industry, disadvantaging publishers and advertisers who lack resources to maintain integrations across multiple proprietary systems.

Similar fragmentation risks exist in developer tools. An independent GitHub served as neutral infrastructure connecting developers across employers, geographies, and technology stacks. A GitHub subordinated to Microsoft's agentic web strategy may prioritize Microsoft ecosystem compatibility over universal accessibility.

What happens now

Dohmke's transition period concluded at the end of December 2025, completing GitHub's absorption into CoreAI. The company has not announced a successor, and the organizational structure suggests the CEO role may have been eliminated or redefined as GitHub becomes a product line within CoreAI rather than an independent operating unit.

Microsoft plans to resume hiring with "more leverage" from AI tools after maintaining flat headcount throughout fiscal 2025. The company's workforce stood at 228,000 at the end of June 2025, with at least 15,000 departures occurring during the fiscal year through layoffs and post-year-close reductions. Whether GitHub's engineering organization will expand, contract, or restructure under CoreAI remains unclear.

The competitive landscape continues evolving. Cursor and similar AI-native development environments attract developers seeking alternatives to Microsoft-controlled infrastructure. GitLab, Forgejo, and Codeberg provide code hosting options for those unwilling to accept Microsoft governance. These alternatives face significant adoption barriers given GitHub's market position, but the integration has accelerated migration interest among privacy-conscious developers and open source advocates.

Microsoft's AI strategy faces continued scrutiny. Research on AI coding tool usage suggests experienced developers prefer collaborative rather than autonomous AI assistance, potentially limiting the agentic web vision's applicability to professional software development. Regulatory attention across multiple jurisdictions examines whether Microsoft's AI practices comply with consumer protection and competition standards.

For the global developer community, GitHub's independence loss represents more than corporate reorganization. The platform hosted open source projects that form the foundation of modern software infrastructure. Contributors trusted GitHub with their work because the platform operated neutrally, serving developers rather than extracting value for a parent company's AI strategy.

That trust now requires re-evaluation.

Timeline

• June 2018: Microsoft announces agreement to acquire GitHub for $7.5 billion in stock
• October 2018: GitHub acquisition closes; Microsoft promises independent operation
• November 2021: Thomas Dohmke becomes GitHub CEO, succeeding Nat Friedman
• June 2021: GitHub Copilot launches as AI coding assistant
• July 2024: GitHub reaches $2 billion annual recurring revenue
• May 2025: Microsoft announces "agentic web" vision at Build 2025, reveals 30% AI code generation
• June 2025: Dohmke promotes GitHub AI strategy on The MAD Podcast
• July 2025: Microsoft reports fiscal year results with GitHub Copilot at 20 million users
• August 2025: Microsoft deploys GPT-5 across platforms including GitHub Copilot
• August 2025: Thomas Dohmke resigns; GitHub integrated into CoreAI under Jay Parikh
• September 2025: Nadella delegates business functions to focus on AI product problems
• October 2025: GitHub Copilot reaches 26 million users
• October 2025: Australian ACCC files lawsuit over alleged Copilot marketing deception
• November 2025: Microsoft acknowledges Windows 11 malfunctions persisting since July
• December 2025: Internal emails reveal Nadella said Copilot integrations "don't really work"
• December 2025: Dohmke's transition period ends
• January 2026: Research shows expert developers maintain strict control over AI coding agents

Summary

Who: Thomas Dohmke resigned as GitHub CEO after leading the platform since November 2021. Jay Parikh, executive vice president of Microsoft CoreAI, assumed oversight of GitHub. Satya Nadella, Microsoft CEO, orchestrated the integration as part of broader AI strategy consolidation.

What: Microsoft ended GitHub's seven-year operational independence by absorbing the developer platform into its CoreAI division. The restructuring positions GitHub as AI infrastructure rather than an autonomous business serving the global developer community.

When: The integration was announced in August 2025. Dohmke's transition period concluded in December 2025. Microsoft acquired GitHub in October 2018 for $7.5 billion, promising at that time to maintain independent operations.

Where: The reorganization affects GitHub's global operations serving over 180 million developers worldwide. GitHub headquarters remains in San Francisco, though reporting structure now flows through Microsoft's CoreAI organization in Redmond, Washington.

Why: Microsoft absorbed GitHub to consolidate AI development infrastructure under unified leadership amid intensifying competition from AI-native coding tools like Cursor. The integration gives CoreAI direct control over training data, developer workflows, and distribution channels while Microsoft struggles with broader AI product quality issues documented in internal communications throughout late 2025.