Microsoft relaunches Copilot for business, now with pay-as-you-go AI agents

Microsoft has launched Microsoft 365 Copilot Chat, a free business AI chat service with pay-as-you-go AI agents, aiming to drive adoption of its premium Copilot offerings.

Key Features and Functionality: Microsoft 365 Copilot Chat represents a rebranding of Bing Chat Enterprise and now includes access to AI agents within the chat interface.

• The platform utilizes GPT-4 for queries and allows users to upload files for analysis, including Word documents and Excel spreadsheets
• Users can create and employ AI agents through Copilot Studio, accessing both web data and work-related information via Microsoft Graph
• The service maintains the core chat experience while adding new agent capabilities previously exclusive to the full Microsoft 365 Copilot subscription

Pricing Structure and Cost Management: Microsoft has implemented a flexible pricing model based on message consumption and usage patterns.

• Basic answers cost one message (1 cent), generative answers cost two messages (2 cents), and Microsoft Graph access costs 30 messages (30 cents)
• Businesses can choose between pay-as-you-go options or pre-purchased consumption packs
• A sample use case involving HR policy queries could cost approximately $64 per day for 200 generative answers and 200 Graph-based responses

Business Strategy and Market Position: The free service serves as an entry point to Microsoft’s broader AI ecosystem, competing directly with ChatGPT and Google’s Gemini.

• Microsoft positions the service as a superior alternative to competitors, offering secure AI chat with file upload capabilities
• The company reports strong adoption of the platform despite naming changes and discovery challenges
• There are no current plans for a trial version of the full Microsoft 365 Copilot ($30 per user monthly subscription)

Strategic Implications: Microsoft’s approach reflects a calculated effort to normalize AI usage in workplace settings while building a pathway to premium service adoption.

• The incremental exposure to AI capabilities could help businesses justify the investment in full Microsoft 365 Copilot licenses
• The pay-as-you-go model allows organizations to experiment with AI agents without committing to full subscriptions
• The success of this strategy could influence how other tech companies approach AI service monetization in the enterprise market

Looking Ahead: While Microsoft’s freemium approach shows promise in driving AI adoption, questions remain about whether businesses will find enough value to justify the significant cost jump to full Copilot subscriptions, particularly as competitors continue to enhance their own AI offerings.