Key Takeaways:
Disney is replacing Microsoft's GitHub Copilot with OpenAI's Codex, a decision that signals growing enterprise dissatisfaction with Microsoft's AI coding tools and a shift toward direct relationships with OpenAI.
The Walt Disney Co. is dropping Microsoft Corp.'s GitHub Copilot in favor of OpenAI's Codex as its primary AI coding assistant, a blow to Microsoft's enterprise AI ambitions at one of the world's largest media companies.
"Once I got Cursor and Kiro, there was no need to use it," a Disney software engineer said of GitHub Copilot, according to an internal message viewed by Business Insider.
The change, effective in August for US staff, also sees Disney dropping Amazon.com Inc.'s Kiro and Q tools while retaining access to Anthropic's Claude Enterprise and Cursor. Eight Disney tech employees told Business Insider they rarely or never used GitHub Copilot, with one product manager describing its output as "needlessly complex."
The defection threatens Microsoft's GitHub Copilot franchise at a time when it faces intensifying competition from OpenAI, Anthropic and Cursor. Disney, with a market capitalization of $171.2 billion and a trailing P/E of 15.75x, represents a high-profile loss that could accelerate enterprise adoption of rival coding tools.
Why Disney's engineers turned away from Copilot
Disney's internal feedback paints a picture of a tool that failed to win over its intended users. A longtime software engineer said their access to GitHub Copilot had "lapsed for lack of use," while another staffer who adopted Cursor and Kiro found no reason to return to Microsoft's offering. The complaints echo broader market challenges for Copilot, which Business Insider has reported "lags behind" rivals like ChatGPT and Claude in adoption.
Microsoft last month shifted GitHub Copilot to a token-based pricing model, saying the previous request-based structure was "no longer sustainable." A Microsoft executive said in June that the change helped fuel the "best month ever" for the GitHub developer platform. Still, the pricing overhaul may have added friction for enterprise customers evaluating alternatives.
OpenAI gains a marquee enterprise client
Disney's adoption of OpenAI's Codex marks a significant enterprise win for the startup, which has been pushing to expand beyond consumer chatbots into developer tools. Disney's streaming leaders have created an AI adoption dashboard to track usage and have encouraged tech employees to use AI tools to work faster, according to Business Insider. "The No. 1 thing is to increase velocity," a high-level Disney AI staffer said.
Claude and Cursor have emerged as fan favorites among Disney tech employees, with some superusers invoking those AI tools tens of thousands of times per day, the report said. One high-level software engineer said their AI tool usage was "probably around 80 percent Claude at the terminal when coding."
What this means for investors
For Microsoft, losing Disney as a Copilot customer raises questions about the product's competitive positioning in the enterprise market. GitHub Copilot is a key component of Microsoft's broader AI strategy, which has invested billions in OpenAI while simultaneously competing with it. Disney's move to adopt Codex directly — rather than through Microsoft's Azure OpenAI service — suggests enterprises are increasingly willing to bypass Microsoft's layer and deal directly with OpenAI.
Disney shares, trading at 15.75x trailing earnings with a 1.52 percent dividend yield and a 21 percent payout ratio, have been modestly undervalued by 13.1 percent relative to GF Value estimates, according to GuruFocus data. The stock's GF Score of 86 out of 100 reflects strong profitability and growth fundamentals, though financial strength scores a moderate 6 out of 10.
The broader enterprise AI coding market, estimated by Gartner at more than $3 billion annually, is still in its early stages. Disney's switch could prompt other large organizations to reevaluate their AI tool stacks, particularly as pricing models shift and new entrants like Cursor gain traction.
This article is for informational purposes only and does not constitute investment advice.
