[lindenksv1]

OP here. If you own the copyright to a work, you can license it in any way you like. You can offer it to some people under a commercial license and to other people under an open source license. Many entities practices dual (or tri or whatever) licensing. When you post things on GitHub, you are essentially dual licensing your work. You're providing it under a very broad license to GitHub and you are providing it under an OSS license (or whatever you like) to other GitHub users. Neither license takes precedence. One license applies to one group of people and the other license applies to the other group of people.

This is very similar to what happens when you sign a contributor agreement before contributing code to an open source project. When you sign the contributor agreement, you're granting a very broad license to your work to the project maintainers. They can then license your work out under any license they want. But likewise, because you are not granting them an exclusive license, you're free to put your contribution license out into the world under any license of your choosing separate and apart from the project that you contributed it to.

Technically, I think the scenario you're describing with AGPL code may well be possible and legal. But practically, I think people would stop using GitHub if they felt that doing so would lead to GitHub/Microsoft undercutting their projects, stealing their customers, or essentially stripping the project of any AGPL obligations. I think that from a business perspective, they're really gambling on the idea that developers will see Copilot as a big boon rather than a value suck. Time will tell whether their gamble has paid off.