Microsoft launches unified Copilot app with usage-based pricing to boost enterprise AI adoption

Microsoft is shifting its strategy for its Copilot AI platform as the software giant keeps looking for momentum in enterprise AI, where Anthropic has been gaining traction.

On Friday, Microsoft introduced an updated Copilot app that can both code and handle complex productivity tasks, a move the company hopes will entice more of its Office 365 customers to pay for the advanced tools.

While Microsoft maintains a dominant position in business software through Office, its flagship work AI product hasn't taken off. Of more than 450 million existing commercial Office 365 seats across the globe, fewer than 7% have licenses for the AI addition.

Microsoft has, to this point, offered its 365 Copilot AI assistant for knowledge work separately from its GitHub Copilot coding agent. The market has been consolidating around easy-to-use products from OpenAI and Anthropic that bundle various functions. Microsoft's launch comes after CEO Satya Nadella, in June, talked up a future Copilot "super app."

Rather than charging for subscriptions like it does for most of its software — the commercial Microsoft 365 Copilot costs $30 per user per month — Microsoft says clients will pay for the Cowork, Code and Autopilot portions of the new app based on usage, similar to how they buy other AI products.

"We're holding a very high bar," Jacob Andreou, Microsoft's executive vice president for Copilot, told CNBC. "This product is at its best when it's just optimizing for user value and for the quality of the output and what it's able to deliver." Cost efficiency is less important, he said.

Microsoft shares are up 3% this year as of Thursday's close, underperforming the Nasdaq and most of the company's megacap peers.

The new Code feature makes it easy for non-technical users to start simple AI-driven programming projects, and is based on the same technology as GitHub Copilot. An Autopilot tab will allow users to create custom agents that can take care of assignments and communicate in Teams and Outlook.

David McLaren, enterprise data and AI leader at consulting firm GHD, said his company has given Microsoft Copilot to 12,000 employees, with around 200 experimenting with Copilot Cowork, which can handle more complex tasks.

McLaren told CNBC that he's excited for the new app "because it makes GitHub-like capability simpler for more people to use."

Microsoft faces an increasingly crowded AI agent market. Meta's Muse app, introduced earlier this month, has shot up to the top of Apple's App Store, following the rising popularity of tools like Instinct and the open-source OpenClaw.

"The problem is that these agents have been almost impossible to bring into the enterprise," Andreou said at a Wednesday product preview for customers in Seattle. He acknowledged to CNBC that adding the coding element to the app is an instance of Microsoft playing catch-up.

And in catering to user demands, Microsoft is still leaning on the foremost models from OpenAI and Anthropic even as it invests in its own models.

With the new app, users of the coding product can manually select which model they want to use, including a cost-efficient offering from Microsoft. In the Home tab, where users go for productivity requests like generating a report and scheduling changes, there's no Microsoft model available.

Companies enrolled in Microsoft's Frontier program, which provides access to the newest features, will be able to use the Home and Code tabs in the coming weeks, with the Autopilot available in private preview by the end of this month.

"When I think about the Frontier program, this is not about any one frontier model," Nadella said at Wednesday's event. "It's about the frontier ecosystem that we want to ensure, where every firm is able to take their human capital that's in the flow of AI, and then being able to build out this continuous learning system."