Microsoft and Google’s battle to integrate AI-powered tools into everyday office life proves to be an uphill one, Axios reports. Both companies had high hopes that businesses would pay extra for access to advanced AI chatbots as part of their productivity suites, but their hand has been forced to a shift in strategy as corporate clients pass on paying an additional monthly USD 20-30 per employee for AI assistance.

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What comes with the price tag? The chatbot-powered tools promised to revolutionize workflows by integrating advanced genAI into everyday work apps such as Word, Excel, Gmail, and Google Workspace. But for large corporations, the cost of rolling out these tools to thousands of employees can add up to mns of USD annually — with many hitting the brakes and prioritizing smaller scale trials before jumping on the wagon.

Pivot. Google recently announced that the Gemini Advanced AI chatbot will be included on itsstandard Workspace plans by hiking the original price by a more humble USD 2 per user per month. Microsoft, however, introduced a dual approach, rolling out Copilot Chat free of charge but with limited functionality. For those seeking the full VIP treatment, the premium tier of Microsoft 365 Copilot remains available at USD 30 per user monthly. Microsoft is also dabbling to expand with a family plan, which would add an extra USD 3 to the original price plan to a smaller number of users.

The bigger picture: Microsoft’s AI marketing head, Jared Spataro, believes that the rise of AI agents as the next frontier could introduce a consumption-based pricing model — where companies can pay for results rather than per user subscription.

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