Microsoft’s $7.5 billion acquisition of GitHub, announced June 4, 2018, shocked the developer community—but under CEO Nat Friedman’s leadership, GitHub flourished, growing from 28M to 100M+ developers and launching GitHub Copilot.
The Reaction
When the deal leaked, developers panicked. GitHub, the world’s largest code hosting platform (28M users, 85M+ repositories), was beloved by the open-source community. Microsoft, historically hostile to open source (“Linux is a cancer,” Steve Ballmer 2001), seemed an existential threat.
#MovingToGitLab trended on Twitter. Developers threatened mass exodus. Concerns included:
- Microsoft might shut down competing projects
- Privacy of private repositories
- Ads or paywalls
- End of open-source neutrality
The Deal
Price: $7.5B in Microsoft stock (GitHub was unprofitable)
Closed: October 26, 2018
Microsoft appointed Nat Friedman (Xamarin founder) as GitHub CEO, replacing co-founder Chris Wanstrath. The choice signaled Microsoft’s commitment: Friedman was respected in open-source circles.
The Turnaround
Under Microsoft, GitHub exceeded expectations:
Growth:
- 2018: 28M developers
- 2020: 56M developers
- 2023: 100M+ developers
Free private repositories (May 2019): Previously $7/month minimum, GitHub made unlimited private repos free—a goodwill gesture costing millions in revenue.
GitHub Actions (2019): CI/CD pipelines built-in, competing with CircleCI, Travis CI
GitHub Codespaces (2020): Cloud development environments
GitHub Copilot (2021): AI pair programmer (OpenAI Codex), $10/month, 1M+ subscribers by 2023—became a revenue driver
Mobile app (2020): Code review on phones
The Controversies
Copilot copyright lawsuit (2022): Class-action suit alleging Copilot violated open-source licenses by training on public GitHub code without attribution. Case ongoing.
ICE contract (2019): GitHub employees protested contract with Immigration and Customs Enforcement; CEO defended it.
Arctic Code Vault (2020): Archiving open-source code in Svalbard, Norway for 1,000 years—seen as either visionary or performative.
YouTube-DL DMCA takedown (2020): GitHub removed youtube-dl repo at RIAA request, then reversed after outcry, strengthening DMCA policies.
The Vindication
By 2023, the acquisition was considered a rare Big Tech M&A success:
- Developer trust: GitHub remained neutral, open-source friendly
- Innovation: Copilot, Actions, Codespaces added value
- Growth: User base tripled
- Profitability: GitHub reached profitability by 2022 (exact figures undisclosed)
Microsoft’s transformation under Satya Nadella (“Microsoft loves Linux”) made GitHub a centerpiece of its developer-first strategy.
Sources: