Evolution of the Copilot pricing model

Introduction

Microsoft announced, on September 25, 2026, an evolution of Copilot’s commercial model : everyday AI stays covered by a fixed price per user, while advanced AI moves to usage-based billing through Copilot Credits. Microsoft justifies this split by the growing gap between routine tasks, already well served by current models, and long-running agentic workflows that consume noticeably more resources.

Everyday AI : fixed-price license

Everyday AI stays covered by the Copilot user license (USL), billed per user per month, unchanged from the current offering. Microsoft justifies this choice through the idea of saturation : past a certain point, a more powerful model no longer improves the outcome of a task that didn’t need it, like summarizing a document or turning a meeting transcript into a bullet list.

The Auto model selector relies on this principle : it evaluates the accuracy, speed, and cost of each request to automatically pick the best-suited model and reasoning effort level. Manual model selection remains available under the USL : GPT-5.6 and Sonnet 5 are included, and new models like Opus 5 will be added with usage limits.

The USL keeps its fair use principle. Under heavy usage, the user first receives a warning, then a choice : switch to the Auto model at no additional cost, or move to credits.

Advanced AI and Copilot Credits

Advanced AI covers work delegated to an agent over a long duration, without continuous supervision : Copilot Cowork, Copilot Code, Copilot Autopilot, the new advanced experiences in apps like SharePoint, as well as frontier models like Fable and Astra. This type of work moves to usage-based billing (UBB), which relies on the USL already required to access these capabilities.

• Credit price : 1 Copilot credit equals 0.01 USD
• Model providers : OpenAI and Anthropic today, with other labs and open-weight models to come

Microsoft notes that usage-billed capabilities remain visible in the product even when they aren’t enabled, so that the full set of Copilot features stays visible to all users.

Spend control for administrators

For Enterprise organizations, usage-billed capabilities stay disabled by default : nothing is billed until an administrator creates a spending policy in the Microsoft 365 Admin Center. This policy makes it possible to :

• Set budgets : At the tenant level, a group level, or a per-user cap within a group
• Configure alerts : Triggered once spend reaches a given threshold
• Choose limit behavior : Warning, the option to request more credits, or no notification shown to the user
• Allocate spend : To existing Azure subscriptions or resource groups, for budget tracking consistent with the rest of the organization

Several tracking capabilities are rolling out in parallel : extending cost management to Copilot Code and Managed Runtime (Copilot Studio agents to follow in October 2026), per-group model-choice management in Cowork, detailed per-scenario consumption insights in Cowork, programmatic spending-policy management through the Microsoft Graph API, and credit-consumption visibility available directly to each user in Copilot.

Conclusion

This new two-speed model clearly separates predictable usage, covered by the existing license, from advanced usage billed on actual consumption. For administrators, the immediate point of attention is the spending policy : without it, no advanced capability can be enabled, which makes it a step to plan for from the start of a Cowork, Code, or Autopilot rollout rather than once that rollout is already underway.

Sources

Microsoft - Techcommunity

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