Microsoft has announced that it will be bundling its AI-powered Office features into Microsoft 365 Personal and Home subscriptions, resulting in a price increase of $3 per month. Previously, users had to pay an extra $20 per month to access these features as part of a Copilot Pro subscription. The move marks a significant shift in Microsoft's strategy, as it aims to bring AI features to a wider user base.

The AI-powered Office features, which include Copilot inside Word, Excel, and PowerPoint, were initially tested in select markets, including Australia, New Zealand, and several Asian countries. However, Microsoft has now expanded this integration to most markets worldwide. According to Gareth Oystryk, senior director of marketing for Copilot Pro and Microsoft 365, the company has always wanted to bring AI features to more users, and this move is part of that plan.

Despite the price increase, existing subscribers can opt out of the AI features and maintain their current pricing. Microsoft has created two new plans, Personal Classic and Family Classic, which will be available to existing subscribers for the next year. These plans will not include the new AI features, but will continue to receive security updates and minor feature updates. New subscribers, on the other hand, will get AI-powered Office features by default with the new pricing changes.

Microsoft is also introducing a new AI credits system, which will work across most of its AI-powered consumer experiences, including Word, Excel, PowerPoint, Outlook, and OneNote. Subscribers will receive a monthly allotment of credits to use on features like image generation in the Designer app or in apps on Windows like Paint, Photos, and Notepad. Copilot Pro, which remains available as a separate subscription, includes unlimited usage of all AI features, based on a fair usage policy.

In addition to the pricing changes, Microsoft is making it easier for users to turn off Copilot in Office apps if they prefer not to use the AI assistant or if their organization has policies against using AI. New settings will be added to key apps, starting with Word, to allow users to toggle off Copilot. This feature will be rolled out to Excel and PowerPoint in the coming weeks.

The move is seen as a strategic play by Microsoft to increase adoption of its AI-powered Office features, which have been met with mixed reactions from users. While some have praised the features for increasing productivity, others have expressed concerns about the potential impact on job security and the accuracy of AI-generated content. Microsoft's decision to bundle these features into Microsoft 365 subscriptions and raise prices may be seen as a way to offset the costs of developing and maintaining these AI capabilities.

Industry analysts will be watching closely to see how users respond to the price increase and the integration of AI features into Microsoft 365. With the AI market expected to continue growing in the coming years, Microsoft's move could have significant implications for the future of productivity software and the role of AI in the workplace.

In conclusion, Microsoft's decision to bundle AI-powered Office features into Microsoft 365 subscriptions marks a significant shift in the company's strategy. While the price increase may be unwelcome news for some users, the move could ultimately drive adoption of AI features and shape the future of productivity software.