“Free, with a catch!” seems to be the business model of the future. Give a piece of software or a subscription away for nothing, but then make it so that using it to any practical degree hinges on micro-payments. We’ve seen it in games, and we’ve seen it in business software.
So it goes with Microsoft 365 Copilot Chat (powered by ChatGPT-4o), which Microsoft announced on January 15 would be “free” for users of Microsoft 365, a suite of cloud-based office software that includes Word, Excel, PowerPoint (ugh), Outlook, and OneDrive.
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Why the sudden generosity? Well, Google is why. The same day, on January 15, Google announced that its AI assistant Gemini would be free to use in Google Workspace apps, and Microsoft is locked in an Ancient Greek-style death match with Google for AI dominance in business software.

freely available, but not quite free
Microsoft Copilot Chat is essentially a version of its free Copilot AI chat, but tailored for businesses and packaged into a consumption-based model, rather than charging any kind of monthly or annual fee. And that itself is a barely one-year-old rebrand of what was known as Bing Chat Enterprise.
“You can purchase messages though the Copilot Studio meter in Microsoft Azure, a pay-as-you-go option, for $0.01/message, or via pre-paid message packs priced at $200 for 25,000 messages/month,” Microsoft wrote on its website the day it was released.
This free version seems designed to whet the appetites of its users enough that they’d eventually shift to Microsoft 365 Copilot, which charges $30 per user per month. The pay-to-play version has been off to a rocky start, though, as businesses fret about the its security concerns.

One of the largest deficiencies of the “free” version is that it doesn’t work within the apps themselves. The $30-per-user-per-month version works in apps, including Teams, Outlook, Word, Excel, and more, whereas the free version is restricted to its own siloed chat.
Because of its limitations and consumption-based costs, I’d reckon that the free version of 365 Copilot Chat functions more as a sort of trial for business users hesitant to jump right away into the deep end of the pool with the full version.
They can test drive the service, but any significant scale-up to using it widely would likely approach or eclipse the cost of paying for the full version.
Still, it’ll be interesting to see how it competes with Google’s free Gemini, which doesn’t rely on a consumption model and works in Gmail and Docs, but does restrict usage to 500 times per month. If anything, the rollout of these free AI chat models didn’t tip the scales, but rather intensify the battle.
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