Microsoft has increased the price of its Microsoft 365 Personal and Home subscriptions globally, including the United States. This marks the first price increase for these plans since their launch 12 years ago. The new prices are $99.99 per year for Personal and $129.99 per year for Home, a $3 per month increase.
The price hike coincides with the introduction of Copilot and other AI-powered features across Office apps like Word, Excel, PowerPoint, and Outlook. These features include document drafting, data analysis, email summarization, presentation generation, and image generation in Microsoft Designer.
Existing subscribers will continue to pay their current rates until their next billing cycle. However, they can access the new AI features immediately. For those who prefer to avoid the price increase, Microsoft offers Personal Classic and Family Classic plans that retain the old prices but exclude AI features. These classic plans are only available to existing customers for one year.
Microsoft emphasizes that it will not use user document data to train its AI models and allows users to disable Copilot if necessary. The company also provides a monthly allotment of AI credits for using the new features, with the option to upgrade to Copilot Pro for unlimited usage at $20 per month.
The price increase and introduction of AI features in Microsoft 365 reflect the growing importance of AI in productivity software. The move is likely to influence user behavior and potentially reshape the online productivity landscape.