SAN FRANCISCO: Microsoft is changing how it charges for its software for the first time in two decades, moving to bill customers with a pay-as-you-go model each time they use its new AI agent.
The change, prompted by the soaring cost of artificial intelligence, came Tuesday as the company launched Copilot Cowork — an AI “agent” that can independently carry out office tasks like drafting documents, building spreadsheets and sending emails.
The tool requires a paid Microsoft 365 Copilot subscription, but every task it runs is billed separately based on how much computing power it consumes.
Copilot Cowork is Microsoft’s take on so-called “agentic” AI, which has turned simple chatbots into assistants capable of acting on a user’s behalf. It can be handed an assignment and run with it on its own, sometimes for several hours.
The reason for the new pricing comes down to cost: running these AI systems demands vastly more computing power than a search engine or chatbot, and usage can vary widely.
The new plan will be “like you’re filling up your gas tank at the pump,” Charles Lamanna, Microsoft’s executive vice president, told the media.
“This is a big evolution for us … which has been a user subscription-based business for so long, for really like two decades,” Lamanna acknowledged.
To guard against runaway bills, the service is disabled by default, and companies can cap spending per employee, team, or department.
Microsoft is not alone in taking this route. Its subsidiary GitHub moved to usage-based billing in early June, sparking anger among developers who saw their bills shoot up.
