Highlights:

  • The main AI feature in Microsoft 365 is an add-on called Microsoft 365 Copilot, priced at USD 30 per user per month.
  • Microsoft will charge based on a usage metric called messages: two messages for prompts processed by a large language model and one for prompts using a less advanced AI.

Recently, Microsoft Corp. and Google LLC have introduced the new pricing for the generative AI features integrated into their productivity suites.

includes an AI assistant called Copilot in its Microsoft 365 productivity suite, while Google provides the Gemini machine learning feature bundle as part of its competing Workspace suite.

The standout AI feature in Microsoft 365 is an add-on called Microsoft 365 Copilot, priced at USD 30 per user per month. Microsoft also offers a free version of the add-on with more limited functionality. A key distinction between the two is that the paid version integrates an AI assistant directly into Microsoft 365 applications like Word, while the free tier does not.

Microsoft has introduced an updated version of the free tier for its add-on, now called Microsoft 365 Copilot Chat. The key enhancement allows users to create AI agents—custom AI tools designed to automate business tasks—a feature previously exclusive to the paid version.

AI agents can be developed using natural language prompts within a tool called Copilot Studio. For instance, a marketing team might create an agent to extract key insights from ad campaign performance data, while customer service teams could leverage the feature to automatically craft responses to frequent user inquiries.

Microsoft will charge for AI agents based on a usage metric called messages. Each user prompt processed by Copilot Studio with a large language model counts as two messages, while prompts handled by a less advanced AI count as one message each. Requests requiring an agent to analyze a company’s business files via the Microsoft Graph feature in Microsoft 365 will use 30 messages.

For companies using pay-as-you-go billing, each message costs USD 0.01. Alternatively, organizations can purchase prepaid agent packs for USD 200, which include 25,000 messages per month.

“Answers are charged for every agent response, not for user prompts. As makers build agents, they can define conversational topics, create branching logic flows and apply generative AI to create responses based on knowledge sources,” Richard Riley, General Manager of Microsoft’s Power Platform business, wrote in a blog post.

The launch of Microsoft 365 Copilot Chat recently coincided with an update to Gemini, Google’s AI toolkit included in its Workspace productivity suite. This upgrade is similarly aimed at increasing the adoption of AI features among business users.

The update is being rolled out to the Business and Enterprise tiers of Workspace. Previously, accessing the complete Gemini feature set required purchasing an add-on priced at USD 20 per user per month. With this update, Google is eliminating that requirement, making the full Gemini feature set available by default with all Business and Enterprise subscriptions. These subscriptions will now cost an additional USD two per user per month.

Customers on the two Workplace plans already had access to a limited version of Gemini, which did not include a sidebar for interacting with the AI directly within Workspace apps like Drive. With the recent update, Business and Enterprise plan customers will now have access to the sidebar.

There are additional improvements as well. According to 9to5Mac, customers using the free, limited version of Gemini will be upgraded to a more powerful LLM called Gemini Advanced with 1.5 Pro. They will also gain access to an AI agent creation tool named Gems and NotebookLM, a note-taking app that also serves as a research tool.

Google’s President of cloud applications, Jerry Dischler, wrote in a blog post, “By removing the need to pay for an add-on to access our latest generative AI capabilities, we’re simplifying our plans and pricing to bring the added value of Google AI to all Workspace customers.”