Why Microsoft's decision to bury GitHub in its CoreAI group is the end of an era

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, and 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.

(This post originally appeared in the Runtime newsletter on August 12. Sign up here to get more enterprise tech news three times a week.)