Microsoft Revamps Copilot with Free AI Chat and Flexible Agent Pricing

Microsoft's New AI Initiative

Microsoft has unveiled a refreshed version of its Copilot for businesses, now introduced as Microsoft 365 Copilot Chat, featuring AI agents. This launch represents the company's efforts to familiarize users with AI in the workplace, enticing them towards a premium $30 monthly subscription for the full Microsoft 365 Copilot suite.

Competitive Edge in AI Chat

"It’s free and secure AI chat that’s GPT-powered," notes Jared Spataro, Microsoft's chief marketing officer of AI, emphasizing its competitive nature. Spataro acknowledged its performance over rivals such as ChatGPT and Google's Gemini, though he did not explicitly name them.

Microsoft 365 Copilot Chat serves as a rebranded iteration of the former Bing Chat Enterprise and now equips users with Copilot AI agents. Previously restricted to premium subscribers, these agents simulate virtual colleagues capable of performing tasks like email management and automation.

AI Agent Utilization and Pricing

Through Copilot Studio, users can create and operate agents that utilize web data and internal company data via Microsoft Graph. Access to these agents is offered via a metered system in Azure or on a pay-as-you-go basis. "The way you can control the spinning of the meters is paying in different ways," adds Spataro, detailing options between an open account or predefined consumption packs that limit spending based on usage.

Comparison of Copilot Chat and Microsoft 365 Copilot. Image: Microsoft

Cost and Message Pricing

The system prices agent usage by messages, with basic responses costing one message, generative answers two, and engagements with Microsoft Graph priced at thirty messages. Spataro explains, "A message is equivalent to 1 cent," allowing businesses to easily calculate costs.

A Microsoft 365 Copilot Chat agent answering HR-related queries consumed 200 generative answers and 200 with Microsoft Graph support, resulting in a cost of $64 for a day's usage.

The Copilot Chat Experience

The chat interface leverages GPT-4o, facilitating document summarization and data analysis. The capability aligns significantly with full Microsoft 365 Copilot features, sans the need to manually upload files, driving more businesses to consider a subscription.

"Despite initial confusion over branding, user engagement remains high," says Spataro, highlighting Copilot Chat's role in acclimating businesses to AI-driven functionalities.

In the competitive AI discourse, Microsoft is banking on Copilot Chat's ability to guide enterprises toward its comprehensive AI solutions, anticipating conversions to the paid services as AI reliance grows.