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
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