Microsoft cuts monthly AI budgets from $100K to about $10K for employees

Microsoft once let some of its employees burn through as much as $100,000 a month on AI. For most staff, that ceiling has now dropped to about $10,000. The cuts landed in the company’s Cloud & AI division. They come alongside a broader pullback in what Microsoft spends internally on Anthropic’s Claude models. One zero goes missing The new per-employee caps knock the monthly allowance from $100,000 to approximately $10,000. The stated driver is concern over excessive usage. One case reportedly stood out. A single employee spent $28,000 on AI tokens in a 28-day stretch. Microsoft’s response has gone beyond the cap itself. Internal tracking of daily AI spending has reportedly intensified. Executives are also pushing departments to stick to dedicated “token budgets.” Each team effectively gets an allowance, and someone is now checking whether it is being respected. The company is also paying closer attention to which models staff choose. The Claude bill gets a haircut Microsoft’s internal spending on Claude was projected to top $1 billion a year as of early 2026. That figure has been cut by more than a third, to below $670 million annually. Two forces are behind the trim. The first...