This is an excerpt from Alex Heath Sourcesa newsletter about AI and the tech industry, distributed only to The Verge subscribers once a week.
To understand how Microsoft sees its role in the AI race, look at what was announced at the company’s GitHub Universe developer conference on Tuesday in San Francisco.
The event marked a turning point for one of Microsoft’s most important but often under-analyzed assets. GitHub, used by more than 180 million developers, wants to be the central platform for AI coding agents. it’s new Agent Headquarters The interface allows external coding assistants, including OpenAI’s Codex and Anthropic’s Claude Code, to connect to the GitHub ecosystem.
The timing is right. If GitHub doesn’t move fast enough, Microsoft risks being left behind. left behind by a wave of agent coding tools that are rapidly redefining what software development looks like. Tools like Cursor, which coincidentally announced a major update This week, they are already orchestrating entire workflows for developers instead of simply autocompleting code. While agents are not yet making a significant impact in other verticals, in software development, the boundary between helper and coworker is rapidly disappearing.
“We need to have a very open ecosystem.”
Jared Palmer, GitHub’s new senior vice president, joined Microsoft from Vercel just 10 days before we spoke ahead of this week’s Universe conference. “GitHub is in this interesting transition phase,” he said. “It needs to evolve into a platform not just for people, but for agents as well.”
Palmer said the goal is to keep GitHub “the home where development happens,” no matter what AI tools developers choose. “We need to have a very open ecosystem,” he told me. In addition to OpenAI and Anthropic, Google, Cognition, and xAI have also committed to bringing their coding agents to Agent HQ in the coming months.
Thanks to GitHub’s long-standing and essential role in code storage, it has a good chance of becoming the connecting layer between agents and codebases. That would mean Microsoft will remain at the center of the developer universe. If not, developers could move their work and data elsewhere over time.
Jay Parikh oversees GitHub as executive vice president of CoreAI at Microsoft. The veteran Facebook CTO and Atlassian board member joined Microsoft almost a year ago and now leads a group of about 10,000 people. Its mandate is to rethink Microsoft’s entire suite of building AI applications: infrastructure, security, and the tools developers use every day.
“We need to move faster,” Parikh told me in an interview this week. “We need to create better tools, different tools. We need to have that ecosystem of developers, that choice and all the things that support this new way of creating software.”
“Humans will start to spend more time on the specification and creative process and delegate the actual calories they spend to GPUs.”
He sees GitHub’s role as essential to that plan, which explains why Microsoft added GitHub to its CoreAI group in August. “You really want GitHub to be that place, that toolchain, that community for developers to really unlock this innovation,” he said. “Humans will start spending more time on the specification and creative process and delegating the actual calories they spend on the GPUs to the encoder agents that generate the code.”
As GitHub COO Kyle Daigle told me, “A developer shouldn’t have to accumulate memory and context in every tool they use in this age of AI. They should be able to connect to GitHub and have that context to determine how they want to work, even if they’re using that tool outside of the GitHub platform.”
That bet ties directly into Microsoft’s long-standing partnership with OpenAI. On the same day as GitHub Universe, CEO Satya Nadella appeared at TBPN to discuss Microsoft’s updated partnership with OpenAI. He said that “GitHub is where that billion to ten billion happened,” a reference to how the initial traction of GitHub Copilot, powered by the OpenAI Codex, convinced him to dramatically expand Microsoft’s initial $1 billion investment in OpenAI.
GitHub has always served two fundamental functions: it is a massive repository of open source code and one of the largest collaboration centers ever built. Engineers use it not only to store and manage their code, but also to find jobs and create communities. Microsoft may have sparked the AI coding boom with the original GitHub Copilot, but now it has to prove it can keep up with where the industry is headed.
