Microsoft made Copilot Cowork generally available this week, after a three-month Frontier preview, and confirmed how it will be charged. From 1 July, every task draws down Copilot Credits at $0.01 each, priced on the model used, the context retrieved, the tool calls made, and the runtime. Cowork also requires a Microsoft 365 Copilot licence at $30 per user per month.
This breaks from how Copilot has worked until now. The standard licence is a fixed cost with no metering. Cowork is billed on consumption because it runs longer, multi-step tasks that cost more. A typical task can use several hundred to over a thousand credits. On Microsoft's own estimator defaults, a single technical worker comes out at roughly $250 for just 35 mixed prompts in one month!
Microsoft claims this is based on the usage they have seen over the trial period. However they were arrived at, they render the product useless. Microsoft markets it for managing email, scheduling, preparing meetings, and producing reports. These are continuous tasks, and a tool that is good at them will be used often. Consumption pricing makes frequent use impossible. Charles Lamanna, who leads Copilot, told Axios that internal testing showed Cowork could not be offered on an unlimited-use basis. It seems it can't be offered at all.
In the same announcement, Microsoft trailed a new model; Cowork 1, due in the coming weeks, post-trained to handle tasks at substantially lower cost. Axios separately reported that Microsoft is testing a hosted version of DeepSeek V4 as a cheaper option. The plan appears to be to move most tasks onto a cheaper model and reduce the per-task cost over time. Copilot has been an unmitigated disaster for Microsoft, Cowork looked like a chance to redeem the product, but for now that's not going to happen.
Takeaways: This is the last chance saloon for Copilot. Reasonably priced, its agentic capabilities and access to Microsoft 365 files and content made it substantially better than the standard offering. But priced at this level, no one will use it for fear of racking up bills of thousands of dollars after maybe only a week's worth of meaningful use. So if Microsoft can't make Cowork 1 or Deepseek deliver the kind of capabilities that are attracting more and more people to Claude, the game will be lost for good.