Microsoft Turns to Rival AWS for GitHub as AI Demand Overwhelms Azure Capacity

The frenzy around AI‑powered coding is growing so fast that Microsoft — despite owning one of the world’s largest cloud infrastructures — has been forced to turn to arch‑rival Amazon Web Services to keep its GitHub platform running. The move underscores a mounting tension: the same AI revolution that is driving record cloud revenue is also creating capacity bottlenecks that threaten to undermine the company’s own infrastructure story.

GitHub chief operating officer Kyle Daigle expects the platform to process roughly 14 billion commits in 2026, a 14‑fold jump from the one billion recorded in 2025. That explosion is largely driven by “agentic development” — Microsoft’s term for AI‑assisted coding tools that let developers offload repetitive tasks. Microsoft has confirmed that GitHub uses multiple cloud providers, and although the company declined to comment specifically on the AWS relationship, it described the arrangement as a “capacity and reliability solution” rather than any strategic shift away from Azure. The long‑term plan remains to migrate the bulk of GitHub workloads to Azure by 2027.

That capacity pinch comes just as Microsoft is rolling out its most ambitious enterprise AI products yet. The centrepiece is Copilot Cowork, a system that handles complex, multi‑step tasks over extended periods, fully embedded in Microsoft 365’s security and compliance framework. Accompanying it is the “Scout” framework, designed to let AI agents independently plan, reason and act. On June 16, Work IQ APIs became generally available, hooking agents into Microsoft 365 data from emails, calendars, meetings and chats. Developers can now build corporate agents that understand real context rather than just fire off commands.

The pricing lever is being pulled hard, too. From July 1, all commercial Microsoft 365 packages will see worldwide price increases. As of June 1, buying Agent 365 requires an existing Microsoft 365 E5 licence, a steep barrier for smaller customers. Partners in the Cloud Solution Provider programme can get a 15% discount on Microsoft 365 Copilot, but only if the client signs a three‑year commitment for more than 300 licences – an offer that runs until the end of September 2026. A new dashboard in the admin centre helps IT departments monitor AI consumption and cap costs.

Those product announcements are backed by strong financial figures that confirm the demand is real. In the quarter ended March 2026, Microsoft posted revenue of $82.9 billion, up 18% year‑on‑year. Operating income rose 20% to $38.4 billion, while diluted earnings per share increased 23% to $4.27. Microsoft Cloud revenue surged 29% to $54.5 billion, with Azure alone climbing 40%. The commercial remaining performance obligations nearly doubled to $627 billion, a forward‑looking gauge of future billings.

Should investors sell immediately? Or is it worth buying Microsoft?

Yet the stock has failed to reflect that momentum. Shares closed at €332.00 in the latest session, roughly 6% below the 50‑day moving average and 14% below the 200‑day moving average. The year‑to‑date loss stands at nearly 18%. The relative strength index (RSI) sits at 37.8 – not yet oversold but indicating significant weakness. A second article from the same period pegged the stock at €331.00, 31% below its 52‑week high of €478.10, with an RSI of 37.1. The 52‑week low from March 2026, €309.35, remains the key support level. A convincing close above the 50‑day average at €354.33 would be needed before the 200‑day average near €386.71 comes into play.

Microsoft’s shareholder returns remain generous: the board declared a quarterly dividend of $0.91 per share in early June, payable September 10, 2026. The company returned $10.2 billion to shareholders through dividends and buybacks in the latest quarter.

On the operational side, the company is also dealing with a handful of technical glitches. The June update for Windows 11 introduced a bug where the deletion confirmation dialog shows internal file names instead of the actual labels; a fix is being prepared. Some third‑party apps have lost the ability to open Office documents after recent Windows updates due to an OLE automation compatibility issue. Microsoft has also closed a security vulnerability in Defender, dubbed “RoguePlanet”, that could have allowed local privilege escalation.

The next earnings report, expected around the end of July, will be the real test. Investors will be watching whether the higher licence fees suppress adoption of Copilot Cowork and other AI tools, or whether the product blitz can translate into sustained revenue growth — and whether Azure capacity can keep up with the demand that Microsoft itself is creating.