Microsoft is integrating its AI-powered Copilot features, previously a separate $20/month Copilot Pro subscription, into its core Microsoft 365 Personal and Family offerings. This integration comes with a price hike of $3 per month for both plans, marking the first price increase for US subscribers in 12 years. While this move might seem like a backpedal from the standalone Copilot Pro offering, Microsoft insists it’s part of a broader strategy to make AI features accessible to a wider user base. The company believes users see the value in integrated AI functionalities and are willing to pay for them within the familiar Microsoft 365 ecosystem.
Existing subscribers have the option to avoid the price increase by opting for “Classic” versions of the Personal and Family plans. These Classic plans will maintain the current pricing but exclude access to new features, including the integrated AI capabilities. Essentially, they preserve the pre-AI functionality of Microsoft 365, allowing users hesitant about AI or subject to institutional restrictions to continue using the familiar platform without the added cost. This option, however, is temporary, available only for the next year and primarily during subscription renewals or cancellations. New subscribers will automatically be enrolled in the updated plans with AI features included.
The company emphasizes that Copilot Pro will remain available at its current price point for “power users.” These users, Microsoft explains, value the priority access to the latest AI models and early access to new features that Copilot Pro offers. This suggests a tiered approach, catering both to the general user who benefits from integrated AI assistance and the advanced user who demands cutting-edge AI capabilities and prioritized access.
Central to this shift is a new AI credit system applicable across Microsoft’s consumer AI experiences. This system provides Microsoft 365 Personal and Family subscribers with a monthly allotment of credits to use for AI-powered features like image generation in Designer or enhancements within Windows apps like Paint, Photos, and Notepad. Copilot Pro subscribers, in contrast, enjoy essentially unlimited access to these features, subject to a fair usage policy. This credit system allows Microsoft to manage resource allocation while providing a taste of AI functionalities to a broader audience, potentially encouraging upgrades to Copilot Pro for those who require more extensive usage.
Microsoft’s decision to bundle AI features into the standard Microsoft 365 subscription reflects a growing trend of integrating AI into everyday productivity tools. While the price increase might initially seem like a hurdle, it represents Microsoft’s bet that AI will become an indispensable part of the user experience. By offering both integrated AI features within the standard subscription and the more advanced, unlimited-use Copilot Pro, Microsoft caters to a range of user needs and budgets.
Furthermore, recognizing the diverse needs and preferences of its user base, Microsoft has implemented a toggle feature to turn off Copilot within Office apps. This feature addresses concerns from users who might find the AI assistance intrusive or who are subject to restrictions on AI usage, such as students in educational settings with policies against AI tools. The toggle, initially available in Word and rolling out to Excel and PowerPoint, empowers users to control the level of AI integration in their workflow. This customization underscores Microsoft’s commitment to providing flexible solutions that adapt to individual preferences and institutional requirements.
