Microsoft just opened the flood gates…

Microsoft just gave Vibe engineers a huge win out of nowhere. Minutes ago, they open sourced the tool that originally started the AI coding bubble, a GitHub co-pilot. As of today, it's officially free and open- source software under the MIT license, meaning you can fork it, modify it, and even build your own billion-dollar competitor without going to prison.

And on top of that, they also open source the Windows Subsystem for Linux or WSL. That's a big deal because for the last year or two, one of the hottest griffs in Silicon Valley has been the promise of an AI powered junior engineer or shovels that can turn any rando on the street into a skilled programmer. Startups have raised millions of dollars by simply forking VS Code and duct taping some LLMs to it.

Like Cursor is now valued at $9 billion, while Windsurf was recently acquired by OpenAI for 3 billion. There are some good upandcoming open- source alternatives like the void editor, but VS Code is on another level and has been the undisputed king of code editors for nearly a decade. In today's video, we'll find out why Microsoft would just give you the code to its extremely valuable co-pilot.

It is May 20th, 2025, and you're watching the code report. The timing for this announcement is interesting to say the least because OpenAI and Microsoft used to be rockolid partners. They used to have an exclusive deal to train their models on Azure, but Microsoft recently ended that deal.

Then just a few days ago, OpenAI announced Codeex, which is a cloud-based coding agent that can generate an ungodly amount of bugs in parallel, but it's a product very similar to GitHub agent mode, which was just announced a few months ago. Then yesterday at Microsoft Build, they announced how it's being integrated directly into GitHub, while also adding support for the model context protocol to all their products, including Windows 11, paving the way to give artificial intelligence full control over your operating system. That's a huge opportunity for developers and hackers alike.

And it's essential for any company that wants to win the AI race to win the hearts and minds of developers. Because according to Anthropic's recent study, the vast majority of people who use and pay for LLMs, unironically, are programmers. OpenAI has been lagging behind with programmers recently.

But to change that, they recently locked in a massive deal by acquiring Windsor for $3 billion, which again is a VS Code fork modified to be an AI slopatic. The timing is really funny because had they just waited a few days, they could have saved those $3 billion and just used the now open- source co-pilot. But I don't think Microsoft open source copilot just to pone Sam Oldman.

Virtually every open source play made by Microsoft has worked out really well. VS Code and TypeScript dominate the webdev ecosystem. The Windows subsystem for Linux made Windows a viable platform for all developers and they even open sourced their old MS DOS code last year.

But this is a bit unusual because Copilot is a paid product costing as much as $390 per year. And you might be wondering, does that mean it'll be totally free now? And the answer is no.

No, it does not. When you pay for Copilot, you're mostly paying for the cloud computing cost to generate your actual code, not the underlying software of Copilot itself. In theory, by open sourcing it, Copilot should improve and ship features faster without the need to pay Microsoft employees.

You may have heard that Microsoft just laid off 6,000 people, including many veteran engineers. So, they could really use the extra help, but it's a win-win for everybody because you could use their code to monetize your own thing or extend it in ways that help other developers, and that's just not possible on closed source platforms like Cursor and Windsurf. Not to mention, you get better transparency and quicker fixes for security vulnerabilities.

I'd say this is a big win for Microsoft, and there will be big rewards for those who can actually code while leveraging AI to become 10x more productive. But, you have 80,000 hours in your career, 40 hours a week, 50 weeks a year for 40 years. That's a lot of time to make a positive impact on the world.

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Join the newsletter today to get a free copy of their in-depth career guide sent to your inbox. And remember, it's totally free because it's a nonprofit and could be the catalyst that changes your direction in life. This has been the Code Report.