Microsoft reveals just 3.3% of Copilot Chat users pay for it

"Only 3.3 percent of Microsoft 365 and Office 365 users who touch Copilot Chat actually pay for it, an awkward figure that landed alongside Microsoft's $37.5 billion quarterly AI splurge and its insistence that the payoff is coming. That single percentage stat undermines the company's carefully polished Copilot success story. On its Q2 FY26 earnings call, Microsoft repeatedly cited "record" AI momentum, telling investors it now has 15 million paid Microsoft 365 Copilot seats, with seat growth up more than 160 percent year-over-year. Satya Nadella described Copilot as "becoming a true daily habit," claiming daily active users are up tenfold year-over-year and that average conversations per user have doubled."

"What Microsoft did not articulate is how small that paid footprint looks against the vast base of Microsoft 365 users experimenting with Copilot Chat for free, as highlighted by Directions on Microsoft analyst Mary Jo Foley. She said Microsoft has some 450 million commercial Microsoft 365 users, many of whom now have access to Copilot Chat at no additional cost. Once you ignore bundled deals and discounts, paid Copilot users are comparatively thin on the ground - an uncomfortable result given the scale of Microsoft's AI spending."

"Microsoft 365 Copilot launched in late 2023 as a $30 per user per month add-on, pitched as a productivity boost baked directly into Word, Outlook, Teams, Excel, and PowerPoint. Since then, Microsoft has worked hard to differentiate Copilot from other chatbots, recasting it as an AI "agent" that can search documents, meetings, and emails, and act on a user's behalf. That promise - more automation, less prompting - is the future Microsoft keeps pointing to when it talks about why all this AI investment makes sense."

Only 3.3 percent of Microsoft 365 and Office 365 users who use Copilot Chat pay for the feature. Microsoft states it has 15 million paid Microsoft 365 Copilot seats and claims daily active users are up tenfold with doubled average conversations per user. Many of roughly 450 million commercial Microsoft 365 users have access to Copilot Chat at no extra cost, making paid adoption relatively small by comparison. Microsoft 365 Copilot launched in late 2023 as a $30-per-user monthly add-on integrated into core apps and positioned as an AI agent that automates tasks across documents, meetings, and email. The scale of AI spending raises questions about return on investment.

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