This is an excerpt from Alex Heath’s Sources, a newsletter about AI and the tech industry, syndicated once a week to Verge subscribers.
To understand how Microsoft sees its role in the AI race, consider what was announced Tuesday at the company’s GitHub Universe developer conference in San Francisco.
The program marks a turning point for one of Microsoft’s most important but often underanalyzed assets. GitHub, which is used by more than 180 million developers, wants to be the central platform for AI coding agents. Its new Agent HQ interface allows outside coding assistants, including OpenAI’s Codex and Anthropic’s CloudCode, to plug into the GitHub ecosystem.
The time is right. If GitHub doesn’t move fast enough, Microsoft risks being left behind by the wave of agent coding tools that are quickly redefining what software development looks like. Tools like Cursor, which coincidentally announced a major update this week, are already orchestrating entire workflows for developers rather than simply coding them automatically. Although agents are not yet making a significant impact in another vertical, software development, the boundary between helper and co-worker is rapidly blurring.
“We need to have a very arms-wide open ecosystem.”
Jared Palmer, GitHub’s new senior vice president, joined Microsoft from Versailles just 10 days before we spoke before this week’s Universe conference. “GitHub is in this exciting transition phase,” he said. “It needs to be built into a platform not just for people, but for agents as well.”
Palmer said his goal is to keep GitHub “the home where development happens,” no matter what AI tools developers choose. “We need to have a very arms-wide open ecosystem,” he told me. In addition to OpenAI and Anthropic, Google, Cognition, and Zee have also committed to bringing their coding agents to Agent HQ in the coming months.
Thanks to GitHub’s longstanding, essential role in storing code, it has a good shot at becoming the integration layer between agents and the codebase. This would mean that Microsoft resides at the center of the developer universe. If it doesn’t, developers can move their work and their data elsewhere over time.
Jayperk oversees GitHub from Microsoft’s Executive Vice President Correa. The longtime Facebook CTO and Atlassian board member joined Microsoft about a year ago and now leads a group of about 10,000 people. His mandate is to rethink the entire Microsoft stack for building AI applications: the infrastructure, security, and tools developers use every day.
“We need to move faster,” he told me in an interview this week. “We need to build better tools, different tools. We need to have that developer ecosystem, that choice, and all the things that support this new way of building software.”
“Humans are starting to spend more time in the specification and creative process and will assign the actual calories spent to the GPU.”
He sees GitHub’s role as essential to the project, which explains why Microsoft folded GitHub into its Korea group in August. “You really want GitHub to be that place, that toolchain, that community for developers to really unlock that innovation,” he said. “Humans are starting to spend more and more time in the specification and creation process and will assign the actual calories spent in the GPU to the coding agents that generate the code.”
As GitHub COO Kill Daigle put it to me, “A developer doesn’t need to build memory and context into every tool in this AI era. You should be able to connect to GitHub and determine how you want to work in that context, even if you’re using that tool away from GitHub’s platform.”
This bet is directly related to Microsoft’s long-standing partnership with OpenAI. On the same day as the GitHub universe, CEO Satya Nadella appeared on TBPN to discuss Microsoft’s latest partnership with OpenAI. He said that “GitHub is where billions to tens of billions have happened”—referring to how OpenAI’s initial acquisition of GitHub CoPlate by Codex convinced him to dramatically increase Microsoft’s initial $1 billion investment in OpenAI.
GitHub has always played two important roles: it is a massive repository of open source code and the largest collaboration hub ever built. Engineers use it not only to store and manage their code, but also to find jobs and build community. Microsoft may have sparked the AI coding boom with the original GitHub copilot, but now it has to prove where it can continue to lead the industry.
