Microsoft will seek to capitalize on the intense interest in artificial intelligence at work with a significant price hike for businesses that decide to use its Microsoft 365 Copilot capabilities when they’re broadly released.
The company will charge an additional $30/user per month for Microsoft 365 Copilot as part of monthly subscription plans that currently range from $12.50/user to $57/user per month. The company announced the pricing Tuesday at its Inspire partner conference, citing a positive response to the Microsoft 365 Copilot preview.
The move amounts to a major bet on the value of AI to Microsoft corporate customers. It’s not clear how many of those customers will be able to stomach the premium, but Wall Street seems to like the direction. Microsoft shares climbed 6% after the announcement, with the potential to reach a record closing price.
- Microsoft stock climbed above $364/share, a market value of $2.71 trillion.
- The company’s market value is second among publicly traded companies to Apple, which is valued at more than $3 trillion.
- A Wedbush analyst, Dan Ives, predicted earlier this month that AI would lift Microsoft to a $3 trillion valuation by early 2024. In a note Tuesday, Ives called the pricing an “eye popping announcement.”
Announced earlier this year, Microsoft 365 Copilot is designed to integrate with Microsoft productivity apps and work with internal business data, going beyond the capabilities of web-based generative AI technologies.
Microsoft is racing against Google and many others to incorporate AI features into its productivity tools.
The company hasn’t yet announced when Microsoft 365 Copilot will be broadly available. Bloomberg Businessweek reports that Microsoft cloud and AI leader Scott Guthrie’s inbox “has been inundated with CEOs asking for access.”
Speaking to the company’s partners at the event, Microsoft CEO Satya Nadella cited the business opportunity that AI represents, given the potential to expand the market for enterprise technology and the economy overall.
“If you have an economy that’s around $100 trillion, we may have $7- to $10-trillion more of GDP growth driven by this next generation of AI technology,” Nadella said, describing it as “a massive partner opportunity.”
Microsoft is leveraging a combination of its own technologies and those from its partner OpenAI to incorporate new capabilities into a wide range of its products. The company has invested billions in OpenAI, seeking to position itself to capitalize on ChatGPT and other AI innovations from the San Francisco-based company.
Microsoft on Tuesday also announced:
- An enterprise version of its AI-powered Bing Chat, designed to protect commercial data and address business privacy concerns.
- An image-based Visual Search feature in Bing Chat, using OpenAI’s GPT-4.
Microsoft’s Inspire partner conference continues through Wednesday.
