Microsoft has expanded its AI-driven Copilot features into Microsoft 365 Personal and Family plans, adding advanced productivity tools to widely used applications like Word, Excel, and PowerPoint.
The integration comes with a $3 per month price increase in the United States, marking the first price adjustment for these plans in over 12 years. For subscribers seeking to maintain their current pricing, Microsoft is offering limited-time “Classic” plans, which exclude new AI features.
The decision to include Copilot reflects Microsoft’s ambition to make artificial intelligence a standard part of everyday productivity.
Gareth Oystryk, senior director for Microsoft 365, stated about the changes in an interview with The Verge, “Our goal has always been to bring these features to a broader audience in a way that works for them and for us.” The rollout builds on months of testing in regions such as Asia, Australia, and New Zealand, where the company evaluated consumer demand for AI-powered tools.
Related: Microsoft 365 Copilot Chat Launches as Pay-As-You-Go Alternative to $30 Plan
Expanding AI Integration Across Applications
With the new updates, Copilot tools are now embedded in core Microsoft 365 apps for all users. The tools offer to streamline workflows by enabling users to summarize documents, generate presentations, analyze data, and manage emails through AI assistance.
Additionally, Microsoft is introducing its Designer app to subscribers, which uses AI to create and edit images based on text descriptions or user-provided visuals. Subscribers also receive a monthly allotment of AI credits to manage their usage of Copilot features and other tools.
Related: AI Adoption Study: ChatGPT Is Holding Its Lead Against Microsoft Copilot and Google Gemini
Oystryk noted the importance of accessibility for these features, stating, “We planned several steps in our Copilot journey to listen, learn, and improve usability and performance. And in October 2024, we launched a pilot of the changes we’re announcing today in a small set of markets. We’re officially taking the next big step by making Copilot part of our Microsoft 365 Personal and Family subscriptions.”
The company has confirmed that existing users will automatically gain access to Copilot tools upon updating their software, with new subscribers receiving the updated plans by default.
Introducing AI Credits and Copilot Pro
A key component of the update is the AI credits system, which regulates usage limits for certain features, such as image generation in Designer and other applications. Subscribers on Personal and Family plans will receive a monthly allotment designed to meet the needs of typical users.
For those with higher usage demands, the $20 per month Copilot Pro tier offers unlimited access under a fair usage policy, as well as priority access to new features and updates.
Related: Microsoft Rolls Out Copilot Vision AI For Browsing Assistance
This dual-tier system allows Microsoft to cater to both casual users and power users. As Oystryk explained, “There is still a group of folks that enjoy the power use of Copilot Pro.”
Microsoft has emphasized that Copilot Pro will remain a core offering for customers seeking advanced AI tools.
Flexible Subscription Options Address User Concerns
In response to potential concerns over price increases, Microsoft has introduced “Classic” subscription plans. The new plans allow existing subscribers to retain their current pricing by opting out of new AI features.
“These plans will only be available for the next year, Personal Classic and Family Classic,” explained Oystryk. “They’ll be available as folks go through the renewal cycle. If they go to cancel, they’ll have the opportunity to pick one of these Personal Classic or Family Classic plans. They’ll continue to get security updates and minor feature updates, but any new additional innovations that we deliver in the future won’t be included in those plans.”
Related: Microsoft Rolls Out New AI Agents for Dynamics 365 Amid Salesforce Rivalry
To further address user feedback, Microsoft is also adding toggles to disable Copilot features in individual applications. “The most interesting piece of feedback we learned is that there are times where our users want to turn off Copilot,” said Oystryk.
“We’ve been working to add new settings to some of our key apps that allow people to toggle off Copilot.”
Privacy and Transparency in AI Features
Microsoft has reaffirmed its commitment to data privacy, stating that personal data and file content will not be used to train AI models. This assurance aligns with the company’s broader Responsible AI principles, which emphasize transparency and ethical AI deployment.
Copilot tools rely on the GPT-4o model from OpenAI and integrate with Microsoft Graph to provide contextual, data-driven insights while maintaining strict privacy standards.
For users who prefer standalone software without cloud-connected features, Microsoft continues to offer Office 2024 as a one-time purchase. However, this option lacks the advanced AI tools and subscription benefits of Microsoft 365 plans, such as cloud storage and security updates.
The integration of AI into Microsoft 365 represents a significant step in the company’s efforts to mainstream artificial intelligence in productivity tools. By combining flexibility, affordability, and advanced features, Microsoft aims to cater to a diverse audience while driving AI adoption.