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Microsoft Introduces Paid AI Features for Office 365, Impacting Enterprise Users

Microsoft is set to bring an end to the era of free AI-powered features for enterprise users of Office 365. In a recent blog post, the company revealed its plan to introduce a monthly fee per user for utilizing artificial intelligence capabilities, in addition to the existing costs for Office, Teams, and other productivity software.

The move comes after Microsoft integrated OpenAI’s popular conversational chatbot, ChatGPT, into its products, allowing users to access AI-powered features directly through their web browsers and search engines. This feature proved attractive for those who preferred Microsoft’s offerings over Google’s.

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Over the past few months, Microsoft has infused its productivity software, including Office apps, Teams, and OneDrive, with AI-driven features to enhance the user experience. This initiative was part of the Microsoft 365 Copilot Early Access Program, and around 600 enterprises, including KPMG, Lumen, and Emirates NBD, have been benefiting from these features. However, Microsoft has now disclosed the pricing details, leaving users concerned about potential cost implications.

The AI-powered features under Microsoft 365 Copilot will soon be exclusively available to enterprise customers who are willing to pay $30 per user per month. In contrast, Microsoft’s current 365 plans have tiered pricing, starting at $12.50 per user per month. This substantial price hike could triple the costs for businesses that wish to continue using these advanced AI capabilities.

Though Microsoft has not specified the exact date for the implementation of these charges, billing could commence once the feature becomes generally available.

Critics argue that Microsoft’s proposed prices are significantly higher than what OpenAI charges for the premium version of GPT or a similar Copilot offering on GitHub. The Verge reports that Microsoft is looking to recoup its substantial investments in OpenAI and the infrastructure required to power the AI behind its services. The company has made substantial expenditures to be a pioneer in this AI space, including significant investments in NVIDIA’s GPUs.

Microsoft’s CEO, Satya Nadella, expressed his belief that Copilot could automate routine tasks and boost productivity, leading to increased business revenues. Having successfully rolled out Copilot for GitHub, the company is confident that AI integration into Microsoft 365 will have a substantial impact across various departments.

The announcement by Microsoft could also set a precedent for pricing strategies among other tech giants like Google, Salesforce, and Zoom, all of whom incorporate AI into their offerings. These companies have witnessed a dip in revenues after the pandemic boom, and the rollout of AI services promises a new source of income, which they are unlikely to overlook.