What happened
On 25 September 2026 Microsoft changed how it sells Copilot in Microsoft 365. It split AI work into two categories and gave each one its own way to pay.
- Everyday AI stays in the per-user licence: meeting summaries, document drafts, analysis. The default Auto mode picks the model and the reasoning effort for each request. Some models are included under fair use, such as GPT 5.6 and Sonnet; others come with limits, such as Opus.
- Advanced AI moves to usage-based billing in Copilot Credits. That covers Cowork, Code, Autopilot, new agentic features in SharePoint and the newest frontier models, Astra and Fable. One credit costs USD 0.01, and access to these features still requires the licence.
Two lines in the admin documentation say more than the price list. First, nothing that consumes credits works in a tenant until an admin sets up a spending policy. Second, every new policy has "Auto-apply new services" switched on by default. Each new Microsoft service or agent that moves to credits adds itself to the existing policy. Microsoft also says that a user who reaches the licence limit will get a choice: keep working on credits, or fall back to Auto. The setting that currently hides these features from users is being retired. A switch that decides who may request access will replace it.
Our take
The most telling sentence is in the documentation, not the press release. Microsoft writes that usage-based billing may be better funded by business units that weigh cost against benefit themselves. The licence stops being the price of Copilot and becomes the entry ticket. The agents that work for hours, the ones Microsoft built its September announcement around, land in a variable line, and by the vendor's own account that line should sit outside the IT budget.
In June, when GitHub Copilot moved to usage-based billing, we wrote that this model punishes a lack of visibility, and that the same shift would reach other software categories. It has now reached Microsoft 365. Something new came with it, though. The question is no longer only "how much do we use" but also "who decides".
Our interpretation: in practice, the defaults will decide. A policy that accepts new services on its own means the scope of spend grows with every Microsoft launch, not with every decision the company makes. Model choice also becomes a budget decision. Inside the licence, Auto picks the model. When someone in Cowork switches to a frontier model, they are paying in credits. We expect many 2027 budgets to book Copilot as a licence cost with no separate line for credits. That is a forecast, not a fact, but it is the same pattern we saw with GitHub Copilot in June.
Why it matters
Private Equity
In a portfolio company rolling out Copilot, the AI cost in the value-creation model now splits into two lines: a fixed one for licences and a variable one for credits. At the next review, ask who in the company owns the second line and what its monthly cap is. If the answer is "IT bought the licences", the variable part of the cost has no owner yet.
Enterprise
Many companies are planning their 2027 budgets right now, which makes this a good moment to separate the two lines. Three decisions are on the table. Which unit funds the credits, and on what key. Whether spending policies should accept new services automatically, or whether each new service goes through a review. Which groups may use frontier models; model profiles currently work only for Cowork. Keep the effect of a limit in mind too: a user who exhausts it loses access to agents until the first day of the next month. Better that the team knows this before quarter-end than during it.
SMB / mid-market
A smaller company that bought Copilot licences usually has no FinOps function and no separate budget per team. That makes it more important to set a policy with a monthly cap and a per-person cap before anyone gets Cowork or Autopilot. Start with one process and one person, as with automation for mid-sized companies: a measured result first, wider access after.
One move for this week
Open the Microsoft 365 admin center, go to Copilot, then the Cost Management tab. Check whether a spending policy exists. If it does, check whether it adds new services automatically and what its monthly cap is. Then write into the 2027 budget the name of the person who owns the credits. If that name is missing, Copilot licences are in the budget and the agents are not yet. Tell us about your case: mailto:[email protected]?subject=Rozmowa%20z%20Aurora%20AI