Microsoft moves Copilot Cowork to usage‑based pricing and eyes cheaper AI models

Microsoft has made Copilot Cowork generally available with a new pricing structure that separates the Microsoft 365 Copilot User Subscription License (USL) from the cost of running AI agents. Customers now purchase Copilot Credits at $0.01 each, with usage‑based charges based on model use, context retrieval, tool calls and runtime. Rough estimates suggest light tasks cost $1‑$3, medium tasks $4‑$7 and heavy multi‑step tasks $7 or more. The shift introduces budgeting and spending‑limit tools to help administrators control unpredictable AI spend.

To mitigate rising costs, Microsoft is evaluating a self‑hosted, fine‑tuned version of the Chinese‑origin DeepSeek model as an alternative to the current OpenAI and Anthropic engines. DeepSeek promises lower compute expenses, but its provenance raises security and regulatory concerns for customers in regions such as South Africa. The move reflects Microsoft’s broader strategy of employing multiple models—high‑performance where needed and cheaper options for routine tasks—while keeping data within Azure’s compliance framework.