Microsoft raises Microsoft 365 Personal and Home prices as it adds Copilot and AI features

A couple of months ago, Microsoft raised the price of the Microsoft 365 subscription for consumers in Australia and New Zealand. To make up for that, the company brought Copilot and several AI-powered features to Office apps like Word, Excel, and others. Now, the change is spreading to other countries across the globe.

This is the first price increase for Microsoft 365 Personal and Home subscriptions in the United States. Ever since the company launched then-Office 365 12 years ago, it has kept the price at $69.99/year (Personal) and $99.99/year (Home). Now, however, the price goes up by $3/mo, with the new prices being $99.99 and $129.99, respectively.

If you are already a Microsoft 365 subscriber, nothing changes for you until your next monthly or yearly payment. Despite that, you can access new Copilot features right away. In addition, those who do not need new AI features and do not want to pay more can opt for the Personal Classic and Family Classic plans. These will allow keeping old prices but with no access to AI features. Microsoft promises to maintain those plans, but "certain new innovations" will only be available in the more expensive subscriptions. Also, the new classic plans are only available to existing customers for one year.

In addition to features like document drafting in Word, data analysis in Excel, email summarization in Outlook, and presentation generation in PowerPoint, Microsoft 365 subscribers can access image generation in Microsoft Designer. However, all these features require AI credits, which will be allotted to every subscriber each month. Microsoft says the amount of credits "should be enough for most subscribers." If it is not, you can switch to Copilot Pro, which costs $20/month and does not have usage limits.

Microsoft also promises not to use your document data to train its models. This reassurance comes after a report spread across the internet, falsely claiming that Microsoft siphons your document data to train its AI models. In addition, Microsoft will let you turn off Copilot with a few clicks, should you do that to comply with rules at your work or school.

You can already access AI-powered features in Office apps if you are a Microsoft 365 subscriber, so just make sure you are using the latest version.

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