
Microsoft is taking a decisive step to mainstream AI adoption by including Copilot features in its Microsoft 365 Personal and Family subscriptions, while implementing its first consumer price increase since the service launched. The move, announced Thursday, adds $3 to monthly subscription costs and makes AI capabilities a default part of the office suite for new subscribers.
Key Points:
- Copilot now available in Word, Excel, PowerPoint, Outlook, and OneNote.
- New subscribers will pay $13 monthly per household or $10 for individuals, marking a 30% increase
- Existing subscribers can opt for 'Classic' plans to maintain current pricing without AI features
The pricing adjustment reflects Microsoft's evolving strategy for AI adoption, moving away from its initial premium-priced Copilot Pro offering at $20 per month. "We know that people are willing to pay for the integration into Microsoft 365," says Gareth Oystryk, senior director of marketing for Copilot Pro and Microsoft 365, in an interview with The Verge. "Our plan all along has been how do we bring this value to as many subscribers as possible in a way that works for them and for us."
For Microsoft's 84 million consumer subscribers, the change introduces AI assistance across Word, Excel, PowerPoint, Outlook, and OneNote. The company is also implementing a credits system for AI features, providing monthly allowances for tasks like image generation in Designer app and Windows tools including Paint, Photos, and Notepad.

The move comes at a critical time in the productivity software market, following Google's recent announcement of AI integration into its Workspace suite. For business leaders and IT decision-makers, Microsoft's consumer pricing strategy might foreshadow similar changes in the enterprise space, where Microsoft 365 dominates the productivity software market.
Microsoft is addressing privacy concerns head-on, with Bryan Rognier, Vice President of Microsoft 365 Consumer, confirming that user data from Copilot interactions won't be used to train foundation models. The company is also adding granular controls, allowing users to disable AI features in specific applications – a particularly relevant feature for educational settings where AI use might be restricted.
Existing subscribers aren't being forced into the new AI-enabled plans. Microsoft has created "Classic" versions of both Personal and Family subscriptions that maintain current pricing and features, though these legacy plans won't receive major new features moving forward. This tiered approach gives price-sensitive customers an option to continue using familiar Office tools without the AI premium.
The integration of AI features into Microsoft's core productivity suite represents a significant shift in how AI tools are being marketed and sold to consumers. Rather than positioning AI as a premium add-on, Microsoft is making it a standard feature – albeit with a price increase to support the technology investment. This approach could set a precedent for how other software companies package and price AI features in the future.
The price increase, while modest compared to the previous $20 Copilot Pro premium, suggests companies are still working to find the sweet spot between accessibility and profitability in AI-enhanced software.