Microsoft has its top-tier distribution advantages, plus they can build native integrations with Github/Azure etc to take things to a new level - think one-click deployments built into VSCode.
In fact, given the rising popularity of Replit/Vercel/etc I wouldn't be surprised if Microsoft is cooking as we speak.
Most of the time they can deliver on...some fraction of some of those.
This is just the AI version of "oh they have Visual Studio + C# + Azure, C# can do FE + BE with ASP.net etc etc so why would anyone ever use anything else?"...and yet, here we are.
They'll deliver some janky, combo of features, it'll be stapled on top of VS Code, it'll be about 65% as good as everything else, but you've got to be all-in-on-MS to really get the value out of it, which will be great for a few enterprise clients, and middling to average for everyone else.
Open Source versions off this will be available soon enough, self-hosted models are only getting better, many orgs are loathe to spend anymore than the absolute minimum on dev-tools (why would they pay for fancy ML stuff that devs will want to run personal versions of anyways) sowhat's the real moat or value prop here?