GitHub Outages Undercut Microsoft's Lead in AI Coding as Rivals Gain Ground

Microsoft entered the generative AI coding era with what appeared to be an insurmountable advantage: GitHub, a platform it acquired for $7.5 billion in 2018 and which now counts 180 million developers. But a string of infrastructure failures, executive departures, and the rise of competing tools have eroded that head start, according to people familiar with the matter.

Since March, GitHub has suffered more than a dozen service incidents lasting longer than one hour, according to the platform's own status page. "We have not met our own availability standards," Vlad Fedorov, GitHub's technology chief, wrote in a March blog post.

At the root of the reliability problems is a drawn-out migration to Microsoft's Azure cloud infrastructure. As of March, only 12.5% of GitHub traffic was flowing through Azure data centers in Iowa, with a target of 50% by July, Fedorov noted. GitHub has historically relied on its own dedicated infrastructure in northern Virginia, and that capacity has not kept pace with demand.

Two people familiar with internal operations, who requested anonymity to discuss private matters, said GitHub effectively ran out of data center space under the added pressure of AI-driven usage growth. Negotiations with Microsoft over capacity needs have further delayed the Azure transition, those people said.

To compensate, GitHub has expanded beyond Azure, now drawing on infrastructure from Amazon, Google, and Oracle in addition to its own facilities. "While we were already in progress of migrating out of our smaller custom data centers into public cloud, we started working on path to multi-cloud," Fedorov wrote in an April blog post.

The outages have drawn sharp criticism from prominent figures in the software industry. 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."

Enterprises are taking notice. Jyoti Bansal, CEO of software delivery startup Harness, said his company has explored launching its own code storage feature. "We are hearing real concerns from enterprise customers, and more of them are actively looking at alternatives," Bansal said. Those alternatives include GitLab and offerings from Amazon and Atlassian.

The reliability issues compound a leadership vacuum at GitHub. Thomas Dohmke announced his departure as CEO in August after roughly four years in the role, and a replacement has not been named. Julia Liuson, a 34-year Microsoft veteran who had been overseeing the developer division, announced her own retirement in April. Earlier this month, two GitHub vice presidents — Tim Allen and Jared Palmer — moved to Microsoft's Xbox division.

The security picture has also come under strain. Early Wednesday, GitHub disclosed that an employee's device was compromised in a security incident, allowing an attacker to obtain approximately 3,800 of GitHub's own code libraries.

On the competitive front, GitHub Copilot faces pressure from newer entrants, including Cursor and Anthropic's Claude Code, which have gained traction among developers. Despite GitHub adding a developer "every second" at its peak, according to remarks Microsoft CEO Satya Nadella made in October, the platform's technical stumbles have handed rivals an opening.

Nadella said on Microsoft's most recent earnings call in April that GitHub was seeing "unprecedented growth, driven by proliferation of agentic coding," and that the company was "hard at work to scale and meet this demand." Microsoft's stock, however, is down 13% this year, trailing all of its megacap peers.

With GitHub's Azure migration incomplete and leadership still unsettled, whether Microsoft can stabilize its infrastructure quickly enough to retain its dominant position in developer tooling remains an open question — one that will likely define the next phase of Nadella's twelve years at the company's helm.

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