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Trey Lockerbie called Microsoft’s (MSFT) $7.5B GitHub acquisition “maybe one of the best technology acquisitions of the last decade” for its dominance in AI coding.
Nearly 140,000 organizations use GitHub Copilot Enterprise (tripled YoY) and the AI business hit a $37B annual run rate (up 123% YoY), validating the flywheel.
GitHub usage-based pricing launches June 1, 2026, pressuring Q4 margins but positioning for longer-term revenue acceleration as the developer pipeline drives Azure cloud growth.
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On a recent episode of We Study Billionaires (TIP813), host Trey Lockerbie laid out a bull case for Microsoft (NASDAQ:MSFT)'s GitHub acquisition. "$7.5 billion for the world's most dominant coding platform, and which is also now the world's most adopted AI coding tool, and then also the primary channel through which Microsoft acquires developers who make cloud decisions," Lockerbie called it "maybe one of the best technology acquisitions of the last decade."
Microsoft announced the GitHub deal in June 2018 and closed it that October for $7.5 billion. Since closing, MSFT shares have returned 340%, with the stock at $415.40 as of May 8, and a market cap of roughly $3.08 trillion. The acquisition price is now a rounding error against Microsoft's scale.
On the Q3 FY2026 earnings call, CEO Satya Nadella made the developer story central. "GitHub itself is seeing unprecedented growth driven by the proliferation of agentic coding, and we are hard at work to scale and meet this demand," he said. He disclosed that nearly 140,000 organizations now use GitHub Copilot in Enterprise, nearly tripled year over year, and that GitHub Copilot CLI usage is nearly doubling month over month.
The financials are equally striking. Microsoft reported Q3 FY26 revenue of $82.89 billion, up 18% year over year, and EPS of $4.27 versus a $4.07 estimate. The AI business surpassed an annual revenue run rate of $37 billion, up 123% year over year, and commercial remaining performance obligations hit $627 billion, up 99%. Full results are in the Q3 FY26 8-K.
The hosts focused on three reinforcing dynamics:
Scale: 100 million registered developers sit inside GitHub.
Productivity: Per Stig Brodersen, GitHub Copilot lets developers write code "20 to 30 times faster in ways that show up directly in the shipping times for future products."
Distribution: Brodersen noted that when "a developer's entire workflow is on GitHub and Visual Studio, I think the path of least resistance" is "deploying in Azure."
That pipeline shows up in cloud results. Azure grew 40% in the quarter, and Lockerbie pointed to a $344 billion backlog with non-OpenAI committed revenue growing 28%, adding that the backlog "doesn't look like a dying company."
Two catalysts matter. GitHub Copilot moves to usage-based pricing on June 1, 2026, which CFO Amy Hood flagged as Q4 margin pressure but a longer-term revenue accelerator. Reddit sentiment has cooled, with the composite index at 50.01 (Neutral) while analyst consensus targets $559.85 with 51 Buy/Strong Buy ratings versus three Hold ratings and zero Sell ratings. The disconnect between retail caution and the developer flywheel is the thesis worth tracking.
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