Microsoft is transitioning its Copilot Cowork platform to a usage-based pricing model as the company expands access to the enterprise AI tool and evaluates lower-cost AI models to support growing demand.

The move comes as advanced AI agents become increasingly capable of handling complex tasks that require repeated interactions with large language models. While these tools can significantly improve productivity, they can also generate substantial computing costs for businesses.

To address these challenges, Microsoft is exploring a fine-tuned version of DeepSeek V4, along with other open-source models, as more affordable alternatives to the Anthropic and OpenAI models currently powering Copilot Cowork. The company expects to announce its chosen lower-cost model in the coming weeks.

The evaluation reflects Microsoft's broader strategy of adopting a multi-model ecosystem rather than relying exclusively on a single AI provider. By offering customers multiple model options, Microsoft aims to provide greater flexibility while managing operational costs.

If DeepSeek is selected, Microsoft says the model would be fully hosted on Azure and offered as an optional choice for customers. The company emphasizes that customer data would remain within Microsoft's cloud infrastructure and continue to benefit from Azure's enterprise-grade security, compliance and data residency protections.

Microsoft also noted that it has applied additional fine-tuning and safety measures to improve model performance and reduce potential bias.

According to Charles Lamanna, Microsoft's Executive Vice President for Copilot, Agents and Platform, internal testing showed that unlimited usage was not financially sustainable. As enterprise customers increasingly rely on AI agents to complete hundreds of tasks each week, compute costs can rise significantly, making usage-based pricing a more practical approach.

The changes highlight Microsoft's efforts to balance affordability, scalability and customer choice as competition intensifies in the rapidly evolving enterprise AI market.