Microsoft is reportedly shifting its AI model preference for Visual Studio Code (VS Code) from OpenAI’s GPT-5 to Anthropic’s Claude Sonnet 4, favoring Anthropic over its long-term partner OpenAI.
This shift, in addition to the tech giant’s recent integration of Anthropic Claude models into its Office 365 apps, signals a difference in Microsoft’s AI strategy, especially driven by the evolving dynamics of partnerships in the current AI ecosystem.
With OpenAI, Microsoft’s partnership with the AI giant has been one of the most notable collaborations in the tech industry. Since 2019 when the partnership started, Microsoft has invested over $13 billion into OpenAI.
The introduction of OpenAI’s Codex and later GPT models powered Microsoft’s GitHub Copilot, which made coding more accessible with AI-assisted suggestions directly integrated into developer workflows. However, recent internal testing and strategic evaluation have led Microsoft to favor Anthropic’s Claude Sonnet 4 as the default AI assistant in VS Code.
According to internal benchmarks shared in an internal email back in June by Microsoft’s developer division head Julia Liuson, Claude Sonnet 4 consistently outperformed GPT models in several key areas that were deemed important to developers.
“Based on internal benchmarks, Claude Sonnet 4 is our recommended model for GitHub Copilot,” Liuson said in an internal email that was seen by The Verge.
While this statement was made before the release of GPT-5 in August, Microsoft is reportedly still guiding its developers to continue using Claude Sonnet 4.
“The company has been instructing its own developers to use Claude Sonnet 4 in recent months,” sources familiar with Microsoft’s developer systems told The Verge.
In addition to this, Microsoft has also introduced a new auto model selection feature in VS Code, which dynamically chooses the best AI model based on availability and performance.
While users on the free tier may be allowed to route on a mix of models including GPT-5, Claude Sonnet 4, and other models based on “optimal performance,” paid subscribers will exclusively benefit from Claude Sonnet 4 as the default model.
Microsoft’s favoring of Claude isn’t actually limited to VS Code. Microsoft has also extended and integrated Anthropic’s Claude models into its Microsoft 365 Copilot suite, which hosts applications like Excel, PowerPoint, Word, and Outlook.
With this integration, Microsoft aims to use AI to enhance productivity tools and ensure they are capable of reasoning deeply and automating complex Excel tasks, generating polished presentations, as well as drafting clearer communications.
Microsoft’s pivot toward Anthropic also comes amidst growing public awareness of evolving tensions and renegotiations within the Microsoft-OpenAI partnership. Recently, both companies signed a MoU to enter a new phase of their partnership, where OpenAI can now branch out and diversify its cloud providers.
