According to this announcement, "if a third party sues a commercial customer for copyright infringement for using Microsoft's Copilots or the output they generate, we (Microsoft) will defend the customer and pay the amount of any adverse judgments or settlement." In this report and others this claim is extended to the company's other products, but I read it as being limited to Co-pilot. Still, it's a move that will be welcomed by developers (though many, like me, still write code the old fashioned way: by looking at someone else's code to see how to do something).
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