Microsoft Corp. has raised the prices for its Microsoft 365 plans due to the artificial intelligence tools it added. The family plan now costs $130 a year, up 30%. Individual subscriptions go for $100 annually, a 43% increase. The new prices take effect immediately for new subscribers, but current users will see the change when they renew.
In a blog post, Microsoft explained why they made the decision. “These changes bring the amazing power of AI to the personal productivity tools that millions of people use every day,” Rognier said. This is the first price change in 12 years for the product, which was formerly called Office 365.
Satya Nadella, the CEO of Microsoft, said, “This is a big step forward in making AI accessible in every business. Its not just about having access to the Copiolet, it’s about unleashing a swarm of intelligence agents to supercharge your productivity and unlock the full power of AI.”
It includes AI features, such as document analysis, text generation, and image creation, under the aegis of Microsoft’s collaboration with OpenAI. The company has also updated its core Office apps and added a few new services in antivirus protection and video editing tools.
Microsoft tested these price increases before in places like Australia, Singapore, and other Southeast Asian markets. Some users were unhappy about it. Daniel Burke, a game developer from Australia, said he was frustrated. “It’s very annoying, and frankly I’m considering simply cancelling entirely and just using Google Docs in the future,” Burke said.
During testing, customers found an option called Microsoft 365 Classic. This was a hidden choice that kept the old pricing but did not include the AI features. Microsoft said this trial helped them to “listen, learn, and improve,” according to Bryan Rognier, vice president at Microsoft.
In the current rollout, there will be similar options, like a Basic plan for web and mobile, available for a short time for users who do not want to pay for the AI upgrades.
Also Read: Microsoft Brings AI Advancements to Its Windows 11
