Microsoft's New Premium AI Feature Raises Concerns About Affordability and Market Competition

Microsoft Corp MSFT looks to charge at least 53% - 83% more to access new artificial intelligence features in its widely used Microsoft 365 service.

CEO Satya Nadella defended the pricing decision as part of a generational technological shift, Financial Times cites from an interview.

On Tuesday, Microsoft announced Bing Chat Enterprise and Microsoft 365 Copilot pricing at its annual partner conference Microsoft Inspire.

Nadella called it the "third leg" of Office after applications like Word and Excel and cloud services like Teams, of "the same class of value," automating routine work and increasing productivity.

Meta Platforms Inc META tapped Microsoft for a commercial version of the social media company's family of open-source large language models, known as LLaMA.

Microsoft looked to charge $30 a month for generative artificial intelligence features in its widely used productivity software.

More than 382 million people used commercial versions of the Office 365 software in the latest quarter.

Microsoft looks to offer a more secure version of its Bing search engine available immediately to businesses, aiming to address their data-protection concerns.

The voluntary upgrade is on top of publicly listed monthly plans ranging from $12.50 per user to $57, meaning the copilot could triple costs for some Microsoft customers, Reuters reports.

Gartner's Jason Wong called out Microsoft's pricing for being higher than other generative AI services. OpenAI charges $20 monthly for the premium version of ChatGPT, while the monthly fee for a business version of Microsoft's generative AI coding assistant, GitHub Copilot, is $19.

Price Actions: MSFT shares traded higher by 0.83% at $362.49 premarket on the last check Wednesday.