Microsoft Office 365 AI assistant pricing exposed: annual fee is US$100,000, 40% more than the regular version, and has 100 customers

Microsoft Office 365 Copilot has expanded its trial scope and is preparing to further explore pricing models.

According to technology media The Information, more than 600 of Microsoft's largest customers, including Bank of America, Walmart, Ford and Accenture, are expected to trial artificial intelligence capabilities in Microsoft Office 365, and at least 100 of them have already added Annual fees of up to $100,000 were paid for each of the 1,000 subscription accounts. An additional $100 per account is required, based on the original Office 365 annual fee

Compared with the classic version, the price of this AI version of Office 365 is at least 40% higher, and it has value-added functions such as automatically writing text in Word documents and automatically creating PPT.

With 600 customers each paying for 1,000 accounts, Microsoft will earn $60 million in revenue.

In March of this year, Microsoft integrated generative AI technology into its product matrix and launched Microsoft 365 Copilot, which it conducted closed testing with 29 companies including General Motors and Chevron.

In May, Microsoft expanded the scope of testing, inviting the first 600 corporate customers around the world to experience this feature, and added semantic indexing, integrating OpenAI's text generation image model DALL-E into PPT, and quickly drafting emails. content and many other smart functions.

According to a person with direct knowledge of the plan told the media, One of the reasons for the higher pricing is that these functions usually require servers with special chips, which consume more power than traditional servers.

In addition, the person also said that the number of participants in the trial program currently exceeds Microsoft's expectations.

Pricing Explore

The small-scale pilot will provide Microsoft with an exploration of pricing strategies, while also providing a reference for other software companies adding AI functions.

Microsoft has reportedly been weighing two potential pricing models for when AI features become widely available: One would charge for the features as add-ons to a basic Office subscription, and another would add the AI ​​capabilities Go to Office for all enterprise users and increase the price of all subscriptions across the board when customers renew their subscription plans.

Microsoft increased the price of Office 365 Basic Edition by 20% in March last year, and the most regular subscription version now costs $22 per month. Under the current version, customers who purchase 1,000 accounts will have to pay approximately $264,000.

Of course, larger customers may have corresponding discounts.

High cost

Cost is the main reason for the price increase of Copilot: whether it is the cost of training the model in the early stage or the cost of running the server in the later stage.

Wall Street Insights introduced earlier that a considerable part of Microsoft’s early investment in OpenAI was realized using points from the cloud platform Azure. In order to cooperate with OpenAI, Microsoft also spent US$1.2 billion to build a supercomputer to develop the model, and invested another US$10 billion at the beginning of this year - equivalent to about one-sixth of Microsoft's annual cash flow.

In the transaction with OpenAI, Microsoft also obtained the right to embed its technology into its own products, which has become one of the sources for Microsoft to realize this investment today.

According to people familiar with the situation interviewed by The Information, Microsoft's trial launch of AI capabilities also gave it time to measure the extent to which ordinary Office users utilize AI capabilities, which affects the energy costs of running models on Microsoft servers. A source revealed that Microsoft plans to expand the preview in the coming months to hundreds of companies that have not yet received access.

It is worth noting that there were earlier reports that when Microsoft publicly launched OpenAI technology, the server capacity it allocated for running OpenAI-powered GPUs on its search engine Bing had been exhausted.

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