Microsoft 365 Copilot Chat: Lowering the Barrier for AI Adoption in the Workplace
The world of AI is a never-ending battle place between the giants of this world and it makes us wonder if every new tool that is launched is really something new or a rebranded solution to increase AI adoption.
The latest update happened on 15th January 2025 when Microsoft launched Microsoft 365 Copilot Chat. It seems like a bold attempt to make AI more accessible for businesses of all sizes in a kind of freemium model. Unveiled this week, Copilot Chat provides a lower-cost, consumption-based alternative to the € 30-per-user Microsoft 365 Copilot subscription, aiming to draw companies into the AI ecosystem and make them comfortable enough to invest in the full suite.
This seems like an interesting move, increasing the capabilities of their free solution to lure in users to buy the paid version. Seems like Microsoft has been looking at the Freemium models of all the games in the App Stores 😉.
What is Copilot Chat
Copilot Chat is essentially a free, scaled-down version of the Microsoft 365 Copilot experience. It offers a secure, AI-powered chat interface that enables employees to:
- Fetch and summarize information from uploaded documents.
- Retrieve insights from web data (using the Bing Search Service)
- Interact with AI "agents" capable of automating repetitive tasks or answering complex queries.
These features are accessible via the Microsoft 365 Copilot app, available across Windows, Android, iOS, and the web.
This doesn't seem very different than the old Bing Chat Enterprise, then rebranded in Copilot and now branded as Copilot Chat. However, there is a big difference, Copilot Chat now includes Copilot AI agents where you can start creating your own agents which was previously only available in the full Microsoft 365 Copilot license. These agents should become our virtual colleagues that can take up a variety of tasks such as monitoring our inbox or automating a series of tasks.
In essence, this rebranding is as such more than just a simple name change. It lowers the entry barrier, letting organizations experiment with AI without committing to large-scale subscriptions.
The below image shows an overview of the features of Copilot Chat vs Microsoft 365 Copilot (paid license)
How Much Does it Really Cost
However, there's a catch to this story. The AI agents are not completely free but work on a pay-as-you-go model or through your Copilot Studio meter. So you're actually paying for these capabilities but it adds a new layer of transparency. Instead of a flat rate, costs are tied to "messages," categorized as:
- Simple Responses: 1 cent per message.
- Generative Responses: 2 cents per message.
- Graph-based Responses (e.g., accessing SharePoint data): 30 cents per message.
For example, a typical HR policy query using generative AI and tenant data might cost € 64 per day if it involves 200 generative responses and 200 tenant-graph queries.
Why Does This Matter
AI adoption in the workplace is no longer a question of if but when. Microsoft is betting that once businesses experience the efficiencies and insights offered by AI, they’ll be more likely to commit to the full Microsoft 365 Copilot package and as such have created this Freemium model. They probably decided on this tactical decision as the adoption of the full-paid license is not happening at the pace they would have expected. The early users and big players have committed but the smaller, more cautious organizations (like probably all the Belgian companies) are hesitating to invest heavily without first experiencing a clear ROI. This is exactly the gap that Copilot Chat aims to bridge.
Microsoft’s consumption-based pricing isn’t just about selling more AI services. It’s about changing how businesses perceive and value AI in their workflows. By giving organizations a low-risk entry point, Microsoft is fostering a culture where AI becomes an everyday tool rather than a premium add-on.
For businesses, the takeaway is clear: tools like Copilot Chat are no longer optional experiments; they’re gateways to staying competitive in an increasingly AI-driven economy.
Our thoughts on this
It's exciting to see that Microsoft is further democratizing genAI solutions to be used by a broad set of users. Features that were quite complex to implement 6 months ago are now available for any enterprise user. This will probably result in more and more users adopting this exciting technology and I estimate that we'll continue to see true business value popping up more and more.
However, as businesses embrace tools like Copilot Chat, it’s crucial to adopt them thoughtfully. Just because something can be automated doesn’t mean it should be. AI adoption should focus on meaningful applications that drive real value—whether improving efficiency, reducing costs, or enhancing user experience.
Moreover, we must remain mindful of the environmental impact of deploying AI at scale. Large language models like those powering Copilot Chat require significant computational resources, which come with a carbon footprint. Businesses should consider balancing AI adoption with sustainability goals, ensuring that innovation contributes to both growth and ecological responsibility.
Finally, users should be aware that there's no free lunch and Microsoft has the ambition to get more users committed to the full Copilot 365 license and as such, premium features will likely always remain paid.
