Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour event in Munich, Germany, on Feb. 25, 2026.
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Microsoft CEO Satya Nadella told employees Wednesday that Anthropic’s restrictions on the requests users submit to Fable’s advanced artificial intelligence model don’t make sense.
“When you use Fable, if it rejects anything random, it’s like, when was the last time you had a creative tool that was programmatically controlled?” Nadella told engineers working on Microsoft’s Copilot AI software, according to a transcript of his remarks provided to CNBC. “It doesn’t make sense.”
Microsoft declined to comment. An Anthropic spokesperson did not immediately respond to a request for comment.
When end users ask Fable about other aspects of creating large models, among other topics, Anthropic may send answers from an older version, according to the support page. Some people have complained about being dumped on social media.
Anthropic said when it announced Fable 5 in early June that it was trying to reduce false positives about blocked applications. Three days after the launch, Anthropic cut off Fable’s access to comply with the US government’s export control order, and on July 1 the company returned the model, saying “the new protections will flag a higher proportion of innocuous applications than previous Fable protections.”
Nadella’s comments come as executives are increasingly looking to more cost-effective models that don’t come from heavily funded labs, but can handle software development and other in-house tasks.
On Thursday, Chinese company Moonshot AI announced an open-source model that it says surpasses recent releases from Anthropic and OpenAI.
The Microsoft chief’s words represent criticism of a key partner and client.
Claude Code’s Anthropic software development tool has become popular among programmers and people with less technical talent. In November, Microsoft said it made a $5 billion investment in Anthropic, as the startup agreed to spend $30 billion on Microsoft’s Azure cloud. This year Microsoft launched Copilot Cowork, a business productivity assistant that draws on startup models.
Investors are worried that Microsoft could face disruption from models that write software faster, as the company allocates tens of billions per quarter to expand its data center. Shares are down 17% so far this year, while the Nasdaq Composite index has gained 11%.
Recently, Nadella has argued that companies should be able to create custom models cost-effectively and take internal data, without letting it flow to other organizations, such as companies in the construction model business. In a blog post on Sunday, he asked Palantir CEO Alex Karp, who told CNBC that technology organizations “want to know that they own the manufacturing process.”
Microsoft offers a Foundry service where developers can use more than 11,000 models, including some from Anthropic and OpenAI.
“It’s impossible that there are only two companies in the world that have a token currency, and everyone is renting it,” Nadella told developers. “It doesn’t make economic sense.” Tokens measure the computing power of AI models.
Microsoft made a strong commitment to OpenAI through a series of investments, but the two companies stumbled and competed against each other after the sudden dismissal of 2023 and the reinstatement of the CEO of OpenAI, Sam Altman, with little notice to Nadella.
OpenAI said in April it would bring its models beyond Azure to the cloud infrastructure leader Amazon Web Services. Microsoft, meanwhile, announced a series of internal models, including one for coding, in June. Its stake in the profitable OpenAI business was worth $135 billion as of October.
Nadella also said it’s good that Microsoft is integrating consumer and corporate products. In March, he announced the former Snap Chief Jacob Andreou will serve as Copilot for both divisions.
The merger is something “we should have done probably on day one,” he said. In April Microsoft said it had more than 20 million paid seats for work-focused Copilot, or 4% of its cloud-based Office customer base.
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