Microsoft bundles its AI-powered Office features into Microsoft 365 Personal and Home subscriptions, but also increases prices accordingly. Previously, Microsoft 365 subscribers had to pay $20 more per month to get Copilot in Office apps like Word, Excel, and PowerPoint as part of a Copilot Pro subscription, but Microsoft is now adding these AI features to Microsoft apps 365 for $3 more. per month. Existing subscribers can, however, unsubscribe from AI features and not experience the price increase.
Microsoft has been testing adding AI-powered Office apps, Copilot Pro’s most important feature, to Microsoft 365 subscriptions in recent months. What was previously only available in Australia, New Zealand and a number of Asian countries is now expanding to most markets around the world.
Although Microsoft seems to be admitting that people aren’t willing to pay $20 more per month for AI-based Office features, Microsoft says it has always wanted to bring AI features to more users.
“We know people are willing to pay for integration into Microsoft 365,” says Gareth Oystryk, senior director of marketing for Copilot Pro and Microsoft 365, in an interview with The edge. “Copilot Pro is an opportunity to learn from our experienced and early adopters. Our plan has always been how to bring that value to as many subscribers as possible in a way that works for them and for us.
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Copilot Pro isn’t going away and Microsoft isn’t reducing its monthly price by $20 either. It will remain reserved for power users who want priority access to the latest AI models, as well as early access to new AI features. “We definitely have a place for Copilot Pro,” says Oystryk. “There is still a group of people who enjoy using the power of Copilot Pro.”
Microsoft is increasing the price of Microsoft 365 Personal and Family subscriptions by $3 per month in the United States to bring these AI-powered Office features to all subscribers. “We’re raising prices for Microsoft 365 Personal and Family for the first time in 12 years,” says Oystryk. “We have never actually increased the price in the US and are increasing it by $3 per month, as well as similar amounts in other markets.”
Nobody likes price increases, and consumers are particularly sensitive to being asked to pay more for AI features right now. If you don’t want to pay extra for these AI features, Microsoft plans to keep existing subscribers at the same price without Copilot in Office apps.
“We have created two new packages that will only be available next year, Personal Classic and Family Classic,” says Oystryk. “They will be available as people go through the renewal cycle. If they cancel, they will have the option to choose one of these Personal Classic or Family Classic plans.
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These plans will only be available to existing Microsoft 365 subscribers, and new subscribers will get AI-powered Office features by default with the new pricing changes. It appears, however, that classic plans won’t benefit from any of Microsoft’s big new features. “They will continue to receive security updates and minor feature updates, but additional new innovations that we offer in the future will not be included in these plans,” says Oystryk.
Microsoft is also introducing a new AI Credits system today, alongside its Microsoft 365 subscription changes. This is a new system that works across most of Microsoft’s AI-powered consumer experiences, including Word, Excel, PowerPoint, Outlook and OneNote. You’ll receive a monthly allocation of credits in Microsoft 365 Home & Family to use for tasks like generating images in the Designer app or in apps on Windows like Paint, Photos, and Notepad. Copilot Pro essentially includes unlimited use of all these AI features, based on a fair usage policy.
Microsoft also makes it easy to disable Copilot in Office apps if you simply don’t want the AI assistant or if you’re a student and your school has policies against AI use. “The most interesting feedback we learned is that sometimes our users want to disable Copilot,” says Oystryk. “We’ve been working to add new settings to some of our key apps that allow users to turn off Copilot.” This will come first to Word today, then to Excel and PowerPoint in the coming weeks.