Microsoft launches AI agent with pay-as-you-go pricing

Microsoft is changing how it charges for its software for the first time in two decades, moving to bill customers with a pay-as-you-go model each time they use its new AI agent.

The change, prompted by the soaring cost of artificial intelligence, came Tuesday as the company launched Copilot Cowork — an AI “agent” that can independently carry out office tasks like drafting documents, building spreadsheets and sending emails.

The tool still requires a paid Microsoft 365 Copilot subscription, but now every task it runs is billed separately, based on how much computing power it consumes.

Copilot Cowork is Microsoft’s take on so-called “agentic” AI, a wave that has gripped Silicon Valley and turned the simple chatbot into an assistant capable of acting on a user’s behalf.

Like rival tools on Google’s and Amazon’s enterprise platforms, it can be handed an assignment and run with it on its own, sometimes for several hours.

Microsoft says one customer used it to compare nearly 4,000 documents in a matter of hours, and that the assistant can prepare complex meetings by synthesizing emails, internal documentation and calendars.

The reason for the new pricing comes down to cost: running these AI systems demands vastly more computing power than a search engine or a chatbot, and usage can vary widely from one user to the next.

The new plan will be “like you’re filling up your gas tank at the pump,” Charles Lamanna, Microsoft’s executive vice president for Copilot and agents, told AFP.

Under the old system “there’s not one overarching user license that makes sense,” he said, given that different users consume widely varying levels of computing power.

The turn is a notable one for Microsoft, whose office software has relied for some two decades on fixed, predictable subscription fees.

“This is a big evolution for us … which has been a user subscription-based business for so long, for really like two decades,” Lamanna acknowledged, calling the new approach “the only way to make the model work.”

To guard against runaway bills, the service is disabled by default, and companies can cap spending per employee, per team or per department.

Microsoft is not alone in taking this route. Its programming subsidiary GitHub moved to usage-based billing in early June, sparking anger among developers, some of whom saw their bills shoot up.

Anthropic, one of the United States’ AI flagships, announced in early June that its newest cutting-edge models would soon be billed by usage rather than included in subscriptions, even premium ones.

Another way to ease the bill: users will be able to choose which model is used, more or less powerful and therefore more or less expensive.

At general availability, Copilot Cowork runs on Anthropic models, including Opus 4.8 and Sonnet 4.6, while customers on the “Frontier” tier can use the state-of-the-art GPT 5.5.

A “significantly cheaper” model, named Cowork 1, is coming soon for everyday tasks. ...