Microsoft is shifting its Copilot (formerly Bing Chat) enterprise product to a consumption-based pricing model and may integrate DeepSeek, the Chinese open-source AI model.
The change moves away from fixed seat licenses and toward pay-per-use billing, a sign that AI operating costs remain high and that Microsoft is experimenting with cheaper alternatives.
Who: Microsoft
What: Copilot “Cowork” moves to usage-based billing; May test DeepSeek
When: Announced in early 2025
Why: Cost pressure and need for flexible enterprise AI pricing
New Billing Model
Microsoft will charge customers based on the actual number of AI interactions, not per user seat. This mirrors how cloud services bill for compute resources.
The price per “message” or “conversation” has not been disclosed, but the model is designed to scale with usage.
“We believe usage-based pricing better aligns AI value with customer spend,” a Microsoft spokesperson said.
DeepSeek Integration Possible
Microsoft is exploring the use of DeepSeek, an open-source large language model from China, as a lower-cost alternative to its own GPT-4-based Copilot.
DeepSeek offers competitive performance at a fraction of the inference cost. If adopted inside Copilot, it could give Microsoft a more affordable AI option for enterprise customers.
No final decision has been made, but internal tests are underway.
Why This Matters
AI inference remains expensive. Microsoft has invested heavily in Azure infrastructure and OpenAI, but the cost per query still eats into margins.
Usage-based billing shifts the financial risk to the customer, but also offers flexibility. Companies that use Copilot heavily will pay more; light users pay less.
DeepSeek, if integrated, could slash costs further. The open-source model is developed by a Chinese hedge fund and is known for its efficiency.
Impact on Competition
Google, Amazon, and other AI providers are watching closely. If Microsoft successfully lowers costs with DeepSeek, it could pressure rivals to also adopt cheaper open-source alternatives.
The move also signals that the battle for enterprise AI is moving from model quality to cost-efficiency.
Legacy Not Affected (Yet)
The new billing model applies only to Copilot “Cowork.” The existing Copilot for Microsoft 365 and the free Bing Chat service remain unchanged for now.
Enterprise customers on annual contracts will be transitioned at renewal.
Bottom Line
Microsoft is adapting its AI monetization to match real-world usage patterns and exploring cheaper models like DeepSeek to keep margins healthy. The result is a more flexible but potentially more expensive product for heavy AI users.
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