Copilot pricing exceeds market expectations by 200%! Microsoft's market value has increased by $100 billion.

Microsoft held its global partner conference on Tuesday and announced the pricing strategy for incorporating generative AI features into Microsoft 365, which includes Word, PowerPoint, Excel, Outlook, and Teams. Subsequently, Microsoft's stock price reached a historic high.

The company stated that Microsoft 365 Copilot software will be offered to enterprise customers at a price of $30 per month.

According to Microsoft's statement, "Copilot can unleash your creativity in Word, analyze data in Excel, design presentations in PowerPoint, organize your Outlook inbox, summarize meetings in Microsoft Teams - whether you attended or not - and more."

Microsoft also announced the availability of a standalone chatbot application for enterprise customers called Bing Chat Enterprise Edition, which will be priced at $5 per user per month.

Analysts express concerns about the high pricing!

The pricing is significantly higher than market expectations. Previously, it was reported that among enterprise customers who were testing the AI features of Microsoft Office 365, at least 100 customers paid an additional $100 per year per account. The official pricing of "30 dollars per user per month" translates to "360 dollars per year per account," which is 260% higher than previously expected.

Bernstein analyst Mark Moerdler noted in a research report that the price of 365 Copilot is higher than his expectations, representing an increase of 53% to 240%, depending on which version of Microsoft 365 a specific customer is using.

Citigroup analyst Tyler Radke also wrote that the price is much higher than his own prediction of $5 to $20 per month. He stated, "While a full launch may take a few months, we believe this is an incremental positive."

The pricing, which is far higher than market expectations, highlights the pricing power of artificial intelligence and confirms that the AI boom is not a one-time bubble.

What can it bring to Microsoft?

Wedbush analyst Dan Ives wrote that he believes the pricing "is very favorable for Microsoft's potential market opportunity in cloud AI" and that cloud revenue could grow by as much as 20% by 2025.

Qin Heping, Chief Researcher of Guotai Junan Overseas Technology, stated that the advantages brought by products like Microsoft 365, embedded with Copilot, will further drive penetration rates and average revenue per user. According to calculations, if the average revenue per user of Microsoft Office 365 Business Standard increases by $100 and the number of business users grows to 337 million, the revenue of Microsoft 365 will reach $88.358 billion.