Notepad and Paint are still free, but Microsoft will charge you extra for AI features

Microsoft’s Windows Notepad and Paint applications have historically been free tools included with the operating system, offering basic text editing and image manipulation capabilities. In February 2025, Microsoft implemented a significant change by introducing AI features to these applications while maintaining their core functionalities as free offerings.

Key Changes to Windows Apps: Microsoft has integrated AI capabilities into Notepad and Paint within Windows 11, transforming these traditionally free applications into hybrid tools with premium features.

• Notepad now includes AI-powered text rewriting capabilities, allowing users to modify content length, formality, and tone
• Paint has been enhanced with AI Image Creator functionality and background manipulation features
• The background removal tool in Paint remains the only AI feature available without a subscription

Subscription Model and Pricing: Microsoft has implemented a credit-based system for AI feature access through Microsoft 365 subscriptions.

• Personal plans cost $10 monthly or $100 annually
• Family plans are priced at $13 monthly or $130 annually
• Each subscription includes 60 AI credits per month
• Only the Family plan owner can access AI features, not additional family members

Usage Limitations and Restrictions: The new AI features come with specific constraints that affect user accessibility and usage patterns.

• Each AI-related task across Microsoft applications consumes one credit
• Users must wait until the following month once their 60 credits are depleted
• Upgrading to Copilot Pro at $20 monthly removes credit limitations
• Core non-AI features remain freely accessible to all users

Strategic Business Context: Microsoft’s implementation of paid AI features reflects broader industry trends and business objectives.

• The company aims to monetize AI investments while encouraging Microsoft 365 subscriptions
• This approach mirrors the freemium model common in mobile applications
• The strategy helps offset ongoing AI research and development costs
• Microsoft is expanding this model across its product ecosystem

Market Implications: The introduction of paid AI features in previously free applications represents a significant shift in Microsoft’s product strategy that could reshape user behavior and market dynamics.

• Users must now evaluate whether the AI capabilities justify the subscription costs
• This change may prompt some users to seek alternative applications
• The strategy could influence how other software companies monetize AI features in basic applications