Microsoft is bundling its AI-powered Office features into Microsoft 365 Personal and Home subscriptions, but it's also raising prices as a result. Previously, Microsoft 365 subscribers had to pay an additional $20 per month to use Copilot in Office applications such as Word, Excel, and PowerPoint as part of a Copilot Pro subscription, but Microsoft is now adding these AI capabilities to Microsoft 365 applications. An additional $3 per month is required. However, existing subscribers can opt out of the AI feature without being affected by the price increase.
In recent months, Microsoft has been testing adding AI-powered Office apps (Copilot Pro's most important feature) to Microsoft 365 subscriptions. Services that were previously only available in Australia, New Zealand and many countries in Asia have now expanded to most markets around the world.
While Microsoft seems to acknowledge that people won't be willing to pay an extra $20 a month for AI-powered Office features, Microsoft says it always wants to bring AI capabilities to more users.
"We know people are willing to pay for integration with Microsoft 365," Gareth Oystryk, senior director of marketing for Copilot Pro and Microsoft 365, said in an interview. edge. "Copilot Pro is an opportunity to learn from our power users and early adopters. Our plan has always been how to bring this value to as many subscribers as possible in a way that benefits them and us."
Copilot in Word. Image: Microsoft
Copilot Pro isn't going away, and Microsoft isn't lowering its $20 per month price. It will be reserved for premium users who want priority access to the latest AI models and early access to new AI features. "We definitely have a place for Copilot Pro," Oystryk said. “There is still a group of people who appreciate the power of Copilot Pro.”
Microsoft is increasing Microsoft 365 Personal and Home subscription prices in the US by $3 per month to bring these AI-powered Office features to all subscribers. "For the first time in 12 years, we are increasing prices for Microsoft 365 Personal and Home," Oystryk said. "We've never really raised prices in the U.S., we've raised prices by $3 a month, and similar prices in other markets."
No one likes price increases, and consumers are especially sensitive right now to being asked to pay more for AI features. If you don't want to pay extra for these AI features, Microsoft plans to keep existing subscribers the same price without using Copilot in Office apps.
“We’ve created two new programs that are really only launching next year: Personal Classic Edition and Family Classic Edition,” Oystryk explained. "They will be available as people go through the renewal cycle. If they cancel, they will have the opportunity to choose one of these individual classic or family classic plans."
Copilot in PowerPoint. Image: Microsoft
These plans are only available to existing Microsoft 365 subscribers, and with the new pricing changes, new subscribers will get AI-powered Office features by default. However, it sounds like the Classic plan won't be getting any major new features from Microsoft. "They will continue to receive security updates and minor feature updates, but any new additional innovations we deliver in the future will not be included in these plans," Oystryk said.
Microsoft today also launched a new AI points system and changes to Microsoft 365 subscriptions. This is a new system that works across most Microsoft AI-powered consumer experiences, including Word, Excel, PowerPoint, Outlook, and OneNote. You'll get a monthly allotment of credits in Microsoft 365 Personal and Home editions for generating images and more in the Designer app or in apps on Windows like Paint, Photos, and Notes. Copilot Pro essentially includes unrestricted use of all these AI features based on a fair use policy.
Microsoft also makes it easy to turn off Copilot in Office apps if you don't need an AI assistant at all, or if you're a student and your school has a policy against the use of AI. "The most interesting feedback we've heard is that sometimes our users want to turn off Copilot," Oystryk said. "We've been working on adding a new setting to some key applications to allow people to turn off Copilot." It's rolling out first in Word today, then in Excel and PowerPoint in the coming weeks.