Microsoft's Copilot Super App Comes with a Usage-Based Twist

Microsoft has rolled out its Copilot super app, which comes with a revamped pricing model that includes both user subscription licenses and usage-based billing. The new pricing setup is an evolution of Microsoft's existing AI services, according to the company.

The regular subscription pays for what Microsoft calls 'Everyday AI,' which includes Copilot Chat and Copilot in various Office apps like Word, Excel, and PowerPoint. However, users wanting more advanced features will need to pay extra through usage-based billing (UBB), which charges based on how much work the AI does.

Microsoft has already used consumption-based pricing for some of its AI services, including Cowork, and Copilot Credits provide the common currency for eligible services billed by usage. The meter itself isn't entirely new, but it's becoming more central as Microsoft pushes Copilot further into agent territory.

Exactly how many credits disappear depends on what Copilot is asked to do, with consumption varying based on models used, context retrieval, task duration, and tools called. More complicated tasks can therefore chew through more credits than simpler ones.

Redmond isn't leaving admins completely at the mercy of an enthusiastic employee and a hungry AI agent. Usage-based features have to be enabled through a billing policy, and administrators can impose organization- and user-level spending limits, configure alerts, and monitor consumption from the Microsoft 365 admin center.

However, this may require a mindset shift for organizations used to knowing what their Copilot seats will cost, according to Simon Baxter at analyst TechMarketView. Customers wanting these agentic capabilities will have to adopt a consumption mindset, along with the cost governance that goes with it.