Microsoft announces that standard price increases of up to 43 percent are now pending for users of Microsoft 365. The company says the sharp increases are necessary to fund the development of AI technology that is now being integrated into products such as Word and Excel.
Starting in February 2025, the price of Microsoft 365 Personal will rise from $70 to $100 per year. For the Family subscription, which includes up to six users, the cost will increase from $100 to $130 per year.
The price increases are also the first since the service was launched in 2013.
– We are investing heavily in AI technology to improve user productivity and efficiency, Microsoft said in a statement to Bloomberg.
The new AI features, known as Copilot, will be integrated into Word, Excel, PowerPoint and other programs in Microsoft’s suite. Copilot can, among other things, generate text, create presentations and automate administrative tasks, Investopedia reports.
Microsoft says the features will help users save time and be more productive.
Microsoft $MSFT is adding non openAI models to power 365 Copilot – Bloomberg pic.twitter.com/EoM8In3mti
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AI central to Microsoft products
The company has invested heavily in AI development, and is said to have invested a total of $99 billion in the area over the past year. At the same time, the investment has been criticized by some users who believe that the increased prices risk excluding some consumers, according to The Verge.
Customers who do not want to take advantage of the AI features will have the opportunity to choose to keep their existing subscriptions in the “Personal Classic” or “Family Classic” versions without a price increase.
Microsoft also offers an AI credit model for features such as image generation, as well as the ability to disable AI features if users wish. Despite this, complaints against the new pricing remain, as critics believe the changes are pressuring consumers to fund AI technology they may not need.
The strategy seems clear: AI will be a central part of Microsoft’s future products and services.