Microsoft says it is now in a “dog fight,” as it witnesses a slow pace of adoption for its AI workplace tool Copilot.
The tech titan is pivoting its Copilot strategy toward paid subscriptions after investor concerns over weak conversion rates, Bloomberg reports.
The change follows internal discussions about sales performance and market expectations.
Microsoft previously emphasized broad, free adoption of Copilot across its Office ecosystem. But leadership is now prioritizing revenue generation, focusing on converting enterprise users into paying customers.
The urgency reflects a gap between usage and monetization, as Microsoft disclosed earlier this year that only about 3% of customers were paying for Copilot, despite a massive installed base of roughly 450 million Office users. Those figures drew criticism from investors and coincided with a sharp decline in the stock.
Says Judson Althoff, chief executive officer of Microsoft’s commercial business,
“We’re in a dog fight right now each and every day at the face of every single customer.”
The company is now setting aggressive targets for paid adoption.
Microsoft aims to achieve subscription growth in the current quarter that is “materially ahead” of prior figures, as it pushes corporate clients to pay for AI-powered productivity tools. Copilot is priced at about $30 per user per month, while a new bundled offering that includes AI features is expected to cost around $99 per user per month.
Microsoft is also positioning Copilot as a platform that can integrate multiple AI models in a secure enterprise environment, as rivals, including OpenAI, continue to expand their reach.
As of Thursday’s close, MSFT is trading at $373, down about 23% so far this year.
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