A new Microsoft 365 "E7" tier could cost up to $99 a month for premium AI — but only 3.3% of existing users pay for Copilot

Microsoft is one of the world’s most sought‑after companies, boasting a market capitalization of $2.92 trillion at the time of writing. That prominence stems largely from its innovations and investments in software, particularly through the Microsoft 365 suite and Windows as an operating system.

While Microsoft CEO Satya Nadella admitted that Bill Gates' software factory vision for Microsoft has helped guide the company for decades, he indicated that "it's no longer enough." He indicated that the tech giant was now doubling down on security, quality, and AI transformation as its core business priorities.

And now, the company's plans are taking shape, at least according to a report by Business Insider's Ashley Stewart, as Microsoft is considering releasing a new AI-powered software bundle for Microsoft 365.

Microsoft offers two enterprise tiers, E3 and E5, which provide businesses with a variety of services, including productivity and security apps. But as it now seems, the tech giant is getting ready to ship a long-rumored "E7" bundle, which could include Microsoft Copilot and its new AI agent hub, Agent 365.

We could think of it as the E5 enterprise tier, but with AI offerings on top. According to sources with close affiliations and knowledge about Microsoft's plan, the company is exploring both per-seat and consumption-based pricing models for E7, with potential charges reaching up to $99/user/month for its E7 AI software bundle.

💬 What do you think about AI being bundled into Microsoft 365?

It remains unclear when Microsoft plans to actually make its new offering broadly available. Interestingly, the company recently announced that it will reevaluate its AI strategy in Windows 11, potentially streamlining or even removing features that users find less valuable, such as Copilot integrations in apps like Notepad and Paint.

Following Microsoft’s FY26 Q2 earnings report, investors remain cautious about committing further capital to the company’s costly AI initiatives. Despite revenue growth, concerns persist that Azure and Microsoft 365 application growth fell short of expectations, while heavy AI infrastructure spending weighed on margins.

For context, the company spent $88.2 billion on capital expenditures last year. The executive indicated that most of the capital has been channelled to serve AI to enterprises and major AI labs, including OpenAI and Anthropic.

Last year, a report by The Information claimed that Microsoft's internal AI efforts were taking an unexpected turn with projected cuts and sales goals for its Azure AI products across the board.

The report further claimed that Microsoft's salespeople were struggling to meet goals, primarily due to the lack of demand for its AI products. While market share trends told a different story, Microsoft denied the claims.

CEO Satya Nadella indicated Copilot AI is seeing massive use, growing "nearly 3x year-over-year," but a separate report claimed that only 3.3% of Microsoft 365 and Office 365 users who interact with Copilot Chat actually pay for it.

It'll be interesting to see whether Microsoft's reported E7 tier for its Microsoft 365 offering will attract interest among users if/when it ships.

Do you think an AI-powered Microsoft 365 bundle will help Microsoft drive more user interest and Copilot sales? Let me know in the comments.

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