Microsoft launches Microsoft 365 Premium, phases out Copilot Pro
Microsoft announced Wednesday that it will discontinue promoting its standalone AI subscription for consumers and instead introduce a new offering that bundles advanced AI features with its traditional productivity suite.
The new plan, Microsoft 365 Premium, will cost $19.99 per month, combining the benefits of Copilot Pro—launched in early 2024 at $20 per month—with the popular Microsoft 365 Family subscription, priced at $12.99 monthly for up to six users and 6 terabytes of cloud storage.
“Other AI tools stop at chat — we deliver that plus so much more,” said Yusuf Mehdi, Microsoft’s consumer marketing chief, in a statement to CNBC.
A Consolidated Consumer Offering
While Microsoft is repositioning its consumer subscription strategy, the company clarified that Copilot Pro is not being discontinued. Instead, Microsoft 365 Premium is designed to provide a more compelling value for individuals and families by merging AI and productivity services under one plan.
Subscribers will gain access to Copilot’s AI features within Word, Excel, and PowerPoint, along with higher usage limits compared to Microsoft’s free Copilot. Microsoft is also adding a key incentive: access to two advanced AI reasoning agents that were previously restricted to enterprise users with Microsoft 365 Copilot subscriptions.
Competition in Consumer AI
The move highlights the intensifying competition among technology companies to monetize the growing demand for generative AI tools. Microsoft offers a free version of Copilot, similar to consumer offerings from Anthropic, Google, and OpenAI. Paid plans are increasingly becoming a way for tech firms to distinguish their services by offering faster performance, more robust features, or higher usage limits.
Microsoft’s deep ties with OpenAI—in which it has invested more than $13 billion—continue to play a central role. OpenAI’s models run on Microsoft’s Azure cloud infrastructure, and the two companies share a unique partnership while also competing in the consumer AI space.
Strong Consumer Growth
Microsoft’s consumer business has shown momentum. The company reported 89 million Microsoft 365 consumer subscribers in the June quarter, an 8% year-over-year increase. Revenue growth from these subscriptions has accelerated for three straight quarters, rising 20% in the June quarter.
With the launch of Microsoft 365 Premium, the company is aiming to capitalize further on this growth by offering a single, streamlined subscription that caters to both productivity and AI demand.
