Microsoft's GitHub merge is complete

Welcome to Runtime! Today: Microsoft's assimilation of GitHub into its new engineering organization is a turning point for software developers, OpenAI scrambles to fix the GPT-5 rollout, and the latest funding rounds in enterprise tech.

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Talk about a pull request

When Microsoft bought GitHub for $7.5 billion in the summer of 2018, some software developers and companies built around code repositories on GitHub worried that Microsoft would quickly commercialize what was considered a neutral open space for collaboration. In anticipation of that response, the two companies took great pains to emphasize that GitHub would "operate independently and remain an open platform."

That independence formally ended Monday, after GitHub CEO Thomas Dohmke announced that he would be stepping down as head of the group to launch a new startup. "GitHub and its leadership team will continue its mission as part of Microsoft’s CoreAI organization, with more details shared soon," Dohmke said in a memo to employees that was posted to GitHub's blog.

• Dohmke said he would stay in his current role until the end of this year, and CNBC reported that GitHub's senior leadership team will soon work for Julia Liuson, a Microsoft lifer who has been with the company for more than 30 years.
• Liuson reports to former Meta executive Jay Parikh, who joined Microsoft last year to build and lead the CoreAI group.
• CEO Satya Nadella foreshadowed this move in January when he announced the CoreAI group, writing that in the generative AI era "Azure must become the infrastructure for AI, while we build our AI platform and developer tools — spanning Azure AI Foundry, GitHub, and VS Code — on top of it."

GitHub's independence within the Microsoft ecosystem was treasured by company executives in the years following the acquisition. After interviewing COO Kyle Daigle at AWS re:Invent 2023 (of all places), we wrote: "GitHub retains the freedom to make its own decisions about how it incorporates new technology — including Microsoft-owned AI technologies — into its products."

• That freedom started to change around the time Microsoft went all-in on building OpenAI's large-language models into the core of Azure and its other enterprise software products.
• GitHub Copilot actually launched before ChatGPT, and it quickly became the AI coding assistant of choice as excitement started to build around the possibility of these new technologies.
• But GitHub Copilot and Microsoft's other open-source development crown jewel — Visual Studio Code — have grown closer together in hopes of warding off AI coding upstarts like Cursor.
• And GitHub engineers worked closely with Microsoft's Developer Division (which is also now part of CoreAI) to release the open-source version of Visual Studio Code's GitHub Copilot extension and its new coding agent in May.

Much of the initial concern about the acquisition in 2018 was around whether or not Microsoft would remain committed to GitHub's open-source principles, but Microsoft has walked the walk when it comes to shedding its past as the world's biggest opponent of open-source software. Now those worries are shifting to the CoreAI group's plans for the enormous amount of code hosted on GitHub.

• An extremely poorly timed service outage Tuesday morning did not help.
• Lots of companies had concerns about the stewardship of their data when evaluating cloud infrastructure services a decade ago, and those concerns have mostly fallen away given the track record of the Big Three.
• But the generative AI era feels different thanks to insatiable demand for the data needed to train LLMs and the growing scarcity of good data to feed into those models.

"Ultimately, we must remember that our internal organizational boundaries are meaningless to both our customers and to our competitors," Nadella wrote in January when announcing the CoreAI group. It is very clear from Monday's announcement, however, that GitHub users saw a great deal of meaning in its relative separation from Microsoft's enterprise software machine and are a little apprehensive about what comes next.

• "The title of [Dohmke's] post - "Goodbye GitHub" - looks like it has dual meaning," wrote Erica Brescia, managing director of Redpoint Ventures and former GitHub COO, on X. "Reading between the lines, GitHub is being fully merged into CoreAI at Microsoft. It has been going in that direction for the past 3.5 yrs, but this marks the end of an era."

Heckuva job, Sammy

Any good vibes surrounding the long-awaited launch of OpenAI's GPT-5 last Thursday did not make it through the weekend as the real world got their hands on the new model. From performance issues to security concerns, users reported widespread dissatisfaction with what was supposed to be the company's crowning achievement to date.

The biggest issue, as noted by Ars Technica, seems to be that OpenAI killed access to older versions of its GPT models when rolling out GPT-5, which broke any number of custom workflows built around those older models with no prior notification. It also doesn't appear to have prioritized security as much as it has during past launches, with one team of researchers jailbreaking its guardrails within hours of release and another AI security company declaring it "nearly unusable for enterprise out of the box."

OpenAI restored access to GPT-4o and increased rate limits, but the reputational damage might have been done. CEO Sam Altman rounded out the launch by telling CNBC that AGI — the mythical fairy-tale notion of artificial general intelligence that he has long described as the core mission of the company — is "not a super useful term."

Enterprise funding

Profound raised $35 million in Series B funding to help companies reinvent their SEO strategies for AI tools.

Datumo landed $15.5 million in new funding for its AI data management platform, which helps companies label and test pretraining data.

The Runtime roundup

CoreWeave's revenue tripled compared to last year but it lost more money than expected, and its shares fell nearly 11% in after-hours trading.

C3.ai's stock fell nearly 30% Monday after it news-dumped a massive revenue miss late on a Friday afternoon, and it seems like CEO Tom Siebel, who announced plans to retire earlier this year amid health concerns, was generating most of its revenue.

Thanks for reading — see you Thursday!