It’s no secret that Microsoft has been struggling to sell its Copilot AI assistant to businesses. The steep pricing has put many businesses off paying extra for Microsoft’s AI services, especially when OpenAI’s ChatGPT has been gaining traction in the all-important enterprise market. Microsoft is now getting ready to tempt more businesses into paying for Copilot, with a familiar trick: bundling.
Microsoft currently offers business Copilot access for $30 per user per month, and if you want the extra Copilot for Sales, Service, and Finance options, these have been a standalone extra $20 per user. Sources familiar with Microsoft’s AI plans tell me that the company is about to ax this standalone $20 add-on and bundle Copilot for Sales, Service, and Finance into the main Microsoft 365 Copilot subscription.
This move will take the price of most of Microsoft’s top AI tools down to $30 per user per month, instead of the $50 per user per month businesses have to pay for Microsoft 365 Copilot and Copilot for Sales, Service, and Finance together — essentially giving away the add-on.
Microsoft is positioning this change as a way to simplify its Copilot subscriptions for businesses, I’m told. It makes it easier for Microsoft’s vast sales teams to convince customers to buy just a single Microsoft 365 Copilot license, instead of the confusing mix of add-ons.
This monetization strategy change is part of a broader AI shakeup across the Microsoft 365 Copilot team and the Business and Industry Copilot (BIC) teams. Charles Lamanna and his BIC team — which focuses on Copilot inside business apps, low-code platforms, and other industry-specific tools — moved closer to the Microsoft 365 Copilot side of the company in June, in what was a big step in consolidating Microsoft’s various business Copilot offerings. This week, Lamanna announced internally that Microsoft’s Copilot, Agents, and Platform Ecosystem (CAPE) team is also joining BIC, as part of an effort to “bring more business value into the broader M365 agent platform.”
Microsoft is increasingly stepping up its focus on AI agents, much like the rest of the tech industry. Lamanna’s BIC team is currently building out an Agent 365 team, led by Nirav Shah, a 24-year veteran at Microsoft. Agent 365 is being developed as a set of tools to manage AI agents and ensure the security and compliance requirements of businesses are met. The Microsoft Admin Center (MAC) teams are also joining the Agent 365 team, under Shah.
“This is critical to launching Agent 365 later this year,” said Lamanna in his memo. “As agents become part of the workforce, the Microsoft Admin Center will need to evolve into the central hub where both people and agents are managed by IT departments.”
Sources tell me Microsoft is planning to announce Agent 365 at its Ignite conference later this year. The introduction of Agent 365 and the pricing shakeup for Copilot means Microsoft is now focused on three areas of monetizing Copilot: Microsoft 365 Copilot, Copilot Studio, and Dynamics 365.
Microsoft plans to monetize autonomous agents that aren’t part of a Copilot license through Copilot Studio, its tool that lets anyone build custom AI agents. Copilot Studio works on a pay-as-you-go basis, where businesses pay for “messages” — a measure of the time and effort for an agent to retrieve information and respond to prompts. Microsoft is changing this to Copilot Credits, which will be used against Dynamics 365 prebuilt agents, Power Apps “agentic experiences,” or Microsoft 365 prebuilt agents.
I asked Microsoft about its upcoming Copilot changes, but the company refused to comment.
All of these Copilot monetization changes and AI reshuffles now mean that the fragmented brand of Copilot inside Microsoft is increasingly aligning under Rajesh Jha, Microsoft’s head of experiences and devices. A year ago nobody really owned Copilot inside Microsoft, with three different leaders responsible for Copilot inside Office, the consumer Copilot, and the teams building Copilot for Sales and other role-based Copilots. Now, the teams building Microsoft 365 Copilot and Microsoft’s AI agent vision all report up to Jha. Microsoft still has its consumer Copilot separate under Microsoft AI CEO Mustafa Suleyman.
As with any reshuffle, changes mean that some leaders move elsewhere. Lili Cheng took on a newly expanded role of CTO of the BIC team in July, but now she’s leaving BIC to return to Microsoft Research. Cheng joined Microsoft in 1995, and was originally part of the social computing group at Microsoft Research. She’s now the CVP and managing director of the NYC, New England, and Montreal Microsoft Research labs.
Microsoft steps up its campus security
A week after Microsoft was forced to lock down a building where protesters got inside vice chair and president Brad Smith’s office, Microsoft continues to beef up its security. Microsoft welcomed back employees from the Labor Day weekend with a security notice about “a few changes we are making in response to recent demonstrations on our Redmond campus.”
Microsoft is limiting employee access to a variety of buildings on its campus, to stop people following employees into buildings. “Because we’ve recently had some people from outside the company use fake Microsoft ID badges, make sure those following you actually swipe their badge and ensure their badge works,” reads a security advisory to Microsoft employees.
The building security changes mean that employees won’t have access to many buildings where they don’t have an assigned desk. I’ve heard from employees over the past week that this has resulted in some lines forming at buildings that have been restricted, particularly if you’re visiting one for a meeting. It has also resulted in some employees not being able to use the dining services in some buildings.
All of these building changes come as Microsoft is getting ready to announce its return-to-office mandate this month, which may well be further complicated by the ongoing threat of protests at the company’s headquarters.
- No, a Windows update probably didn’t brick your SSD. Last week there were a lot of reports of Windows update KB5063878 causing some SSDs using Phison controllers to fail. Microsoft and Phison have both claimed they’ve been unable to re-create the issues, with Phison even running more than 2,000 test cycles. YouTuber JayzTwoCents suggests the problem is worse than reported, though. The amount of reports and varied hardware suggests something is going wrong, but it’s still not clear whether it was a routine Windows security update or not.
- Microsoft fires four employees for participating in Palestine protests on campus. Microsoft moved quickly to react to employees setting up encampments at the company’s headquarters and accessing the office of Microsoft president Brad Smith last week. After initially firing two employees who were directly involved in the sit-in protest, Microsoft then fired another two employees “in connection” with demonstrations on campus. As I wrote last week, the Microsoft employee protests have reached a boiling point.
- Microsoft’s next annual update for Windows 11 is in Release Preview testing. Microsoft surprised everyone with the release of version 25H2 of Windows 11 on Friday. The update shares the same new features and enhancements as the previous 24H2 version, which flips on new features throughout the year. That means there aren’t any huge immediate additions until Microsoft rolls out the required enablement packages to switch them on.
- Blizzard’s Diablo team has unionized. More than 450 game developers on Blizzard’s Diablo team have formed a union. It’s one of the largest groups of Microsoft’s game developers to do so, and it includes artists, engineers, developers, and support staff across the Diablo franchise. More than 3,500 employees at Microsoft are now in Communications Workers of America (CWA) unions, including the more than 500 World of Warcraft developers that formed Blizzard’s first wall-to-wall union last year.
- Microsoft AI launches its first in-house models. Microsoft’s AI division has announced its first homegrown AI models: MAI-Voice-1 AI and MAI-1-preview. The MAI-Voice-1 model can generate a minute’s worth of audio in under a second on a single GPU, and is being used to power the Copilot Daily feature. MAI-1-preview is designed to follow instructions and will be “providing helpful responses to everyday queries.” Both models will help power certain parts of Copilot, which has typically relied on OpenAI’s models so far. It’s another twist in the complicated OpenAI partnership.
- Xbox’s cross-device play history syncs your recently played games on every screen. Microsoft has started rolling out its Xbox cross-device play history. A new section on the home screen of Xbox consoles or inside the Xbox PC app will display cloud games as part of a recently played list that roams across Xbox consoles, PCs, and handhelds.
- Windows is getting a better em dash keyboard shortcut. Rejoice, Windows and em dash fans! Microsoft is finally adding an improved Windows-wide keyboard shortcut for the em dash and en dash. The change is part of the latest Windows 11 Dev channel builds, so it should arrive for all Windows 11 users later this year. Currently, you have to use Alt+0150 for an en dash (–) and Alt+0151 to get em dash (—), which is problematic on smaller keyboards without numpads.
- Microsoft Word now automatically saves new documents to the cloud. Microsoft is making a big change to how Word for Windows saves documents. The word processing app will soon automatically save new documents to the cloud, instead of having to enable AutoSave and cloud storage options. Microsoft 365 Insiders are testing the changes right now, and I think they’re going to be controversial to those who want to avoid OneDrive and other cloud services. Microsoft has been increasingly pushing Word users to save documents to the cloud, with the AutoSave function that stores documents in the cloud by default. The software maker has also been using nag screens in Windows to convince people to enable OneDrive backup settings, which have proved unpopular with Windows users.
- Microsoft’s Copilot AI is now inside Samsung TVs and monitors. Microsoft has launched its Copilot AI assistant on Samsung’s 2025 lineup of TVs and smart monitors. You can use Copilot to get movie suggestions, episode recaps, and for other queries. Microsoft is using the Copilot Appearance character that it launched last month, and the beige blob will float and bounce around your TV or monitor while it’s responding to questions.
- Microsoft has a discount AI deal for the US government too. The General Services Administration (GSA) and Microsoft have announced a discount deal for Microsoft 365, Copilot, and Azure this week. The deal promises “potential savings of $3.1 billion in the first year,” which includes free access to Microsoft 365 Copilot for a year. OpenAI and Anthropic have been offering similar discounts to government users for AI tools, as the race to secure enterprise customers heats up.
- Microsoft gave Perfect Dark’s developers a chance to save the game — after it was already canceled. Microsoft’s layoffs hit Xbox hard in July and even forced the game studio building Perfect Dark to shut down. While The Initiative was the developer on Perfect Dark, a new report suggests that Microsoft gave the game’s other set of developers — Tomb Raider studio Crystal Dynamics — a chance to revive the game. Microsoft doesn’t own Crystal Dynamics, but there were talks for Take-Two to fund and publish the game instead. Those talks reportedly fell through and led to a round of layoffs at Crystal Dynamics last week.
- Microsoft engineer dies on Silicon Valley Campus. 35-year-old software engineer Pratik Pandey was found dead at Microsoft’s Silicon Valley campus last month. Pandey was found in the early hours, and the cause of death is still pending, according to Bloomberg. Pandey was part of Microsoft’s cloud and AI group, and worked on the company’s Fabric software. I asked Microsoft to comment on Pandey’s death, but the company did not respond.
- Microsoft Flight Simulator 2024 gets better DLSS 4 support. Asobo Studio has updated Microsoft Flight Simulator 2024 to include DLSS 4 Multi Frame Generation support. RTX 50-series owners can enable up to 4x Multi Frame Generation, while RTX 40-series GPUs can still enable the regular Frame Generation support with DLSS 4.
- Microsoft’s PowerToys are about to add two big missing Windows features. Have you ever wanted Windows 11 to automatically switch between light and dark modes based on a schedule, or help you find keyboard shortcut conflicts? Well, Microsoft is about to solve both of these missing Windows features with PowerToys. The new keyboard shortcuts conflicts tool is already live, and the dark and light mode switching is coming soon. I’m not sure why Microsoft has built this natively into Windows 11, but at least there’s an official tool now rather than having to rely on third-party apps.
- Microsoft open-sources its 6502 version of BASIC from 1976. After years of unofficial copies of Microsoft’s 6502 BASIC floating around on the internet, the software giant has released the code under an open-source license. 6502 BASIC was one of Microsoft’s first pieces of software, adapted in 1976 by Microsoft cofounder Bill Gates and early employee Ric Weiland to run on the 6502 CPU that powered the Apple II, Atari 2600, Nintendo Entertainment System, and Commodore 8-bit series.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me at [email protected] if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at [email protected] or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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