Microsoft on Wednesday announced the launch of Microsoft 365 Premium, a new consumer subscription tier that combines artificial intelligence features with its suite of productivity applications and cloud storage for $19.99 per month.
The offering marks a shift in Microsoft’s consumer strategy, following the debut of Copilot Pro in early 2024, a standalone AI subscription priced at about the same. By bundling Copilot’s generative AI capabilities with the core Microsoft 365 apps—Word, Excel, PowerPoint, and more—along with expanded cloud storage, the company is effectively consolidating two popular services into one package.
“Other AI tools stop at chat — we deliver that plus so much more,” said Yusuf Mehdi, Microsoft’s executive vice president and chief marketing officer for consumers, in a statement. Microsoft emphasized that Copilot Pro will continue to be offered as a separate subscription, but Premium is positioned as a broader value bundle.
The company is also enhancing the new plan with features previously reserved for enterprise users, including two advanced AI reasoning agents that extend Copilot’s ability to analyze and synthesize information. Premium users will have access to higher usage limits compared to free versions of Copilot or standard Microsoft 365 subscriptions.
Microsoft’s push comes as technology giants race to expand the consumer market for generative AI tools. OpenAI, Google, and Anthropic all sell paid subscription plans, while Microsoft has leaned heavily on its deep partnership with OpenAI, investing over $13 billion and integrating its models across Copilot and Azure cloud services.
The new plan builds on Microsoft’s growing momentum in consumer subscriptions. In the June quarter, the company reported 89 million Microsoft 365 consumer subscribers, up 8% year over year, with revenue growth from these products accelerating for three straight quarters, hitting 20% growth in June.
The launch also comes as Microsoft forecasts significant demand for “AI PCs,” a category of Windows devices with AI functionality built directly into the operating system. The company estimates more than 50 million units will sell over the next year, underscoring its bet that consumers want AI seamlessly integrated into their daily digital workflows.
Pump Radar
Stock Alerts