Just when you thought life had enough acronyms, along comes another one. We’ve got KPIs, ROIs and, for some of us Millennials, the lingering temptation to still finish every message with ‘LOL’. Now Microsoft is adding UBB to our Copilot vocabulary. This is one worth getting to grips with, because Usage-Based Billing could affect how businesses access and pay for Copilot’s more advanced AI capabilities.
Before you start worrying about a surprise Copilot bill, there’s some good news. Microsoft isn’t replacing the subscription model we’re used to with this update. Everyday AI will continue to sit within your standard licence for the time being, while some more advanced AI capabilities will be charged based on how much you use them. So, the important question becomes: where does everyday AI stop and advanced AI begin?
What’s the difference?
- Everyday AI is the Copilot work you direct such as drafting content, summarising information and carrying out routine analysis: the kinds of AI tasks most of us are used to now. You’re still steering, but Copilot is helping with the heavy lifting.
- Advanced AI goes further, handling more complex, longer-running work. An agent might research across several sources, analyse the findings and produce an output on your behalf. And according to Microsoft, those platforms where usage-based billing will start to apply for these tasks are Cowork, Code, Autopilot, and frontier models.
So, tell me more about these acronyms!
- User subscription licensing (USL): Think of USL as the everyday Copilot license. It covers the everyday AI tasks for a fixed price. Copilot’s Auto mode selects the right model and level of reasoning ‘under the hood’, so users can focus on the task rather than worrying about which AI model to choose.
- Usage-based billing (UBB): This comes into play when you move beyond everyday AI into more advanced tasks. It doesn’t replace your existing subscription. You’ll still need an eligible Copilot license, with any UBB costs from buying Copilot Credits to action these advanced AI requests sitting on top. It gives organisations access to more powerful tools but also makes monitoring and managing AI spend increasingly important.
- Credits: Not an acronym, but terminology nevertheless – Microsoft are referring to these usage-based billing values as ‘Credits’ rather than the more commonly used ‘tokens’ which might have already crossed your radar with how AI processing billing has started to be applied.
Do I have to do anything?
New to Microsoft Copilot Business?
From mid-November 2026, new customers buying directly from Microsoft will have pay-as-you-go billing switched on by default. A limit of 4,000 Copilot Credits per user, per month will be set, but this isn’t a bundle of free credits. Think of it as a spending ceiling: you pay for what you use, up to the limits set by your administrator.
Already using Copilot? Nothing changes automatically just yet.
For now, it’s largely business as usual. UBB won’t automatically be switched on as part of the November rollout, and your existing subscription and payment terms won’t change. If you do want access to usage-based capabilities, your admin can enable them through the Microsoft 365 admin center. Microsoft says an easier way to do this is coming from early 2027.
But I can see new AI tools, does this mean I’m now paying extra for AI?
Not necessarily. From the end of January 2027, you may start seeing options such as Cowork, Code and Autopilot appear in Copilot, but seeing them doesn’t mean they’re switched on or costing you anything. Your organisation’s admin still needs to give you access and set up the appropriate spending policy and Copilot Credits. If they haven’t, you’ll simply see an option to ‘Request access’ or ‘Learn more’ instead.
What this means for you, and your pennies
So, what does all this mean for the Copilot bill? Well, it could make things a little less predictable. “How much does Copilot cost us?” may no longer have one neat, per-user answer. Alongside your regular license costs, advanced AI use could add an extra, variable layer depending on how your organisation uses it.
For users, requests for additional credits can be sent to the administrator to review. Admins should be able to pull in the reigns by setting budgets at user- or group-level. This means they can decide who can access advanced AI tools (and therefore credits), and introduce caps or restrictions to particular models. Over time, Microsoft also states that they’ll be able to create detailed reporting breakdowns of spend and usage, and with alerts to let you know when spending approaches your defined cap, which will be very helpful to those who are keeping a close eye on budgets.
If you’re looking for a solution that provides more predictable billing, take a peek at our BrandIn product that serves up all of your beautiful, on-brand content in-app. You can read more about how BrandIn pricing works here.
Microsoft’s modification in billing also creates an interesting change in the conversation for businesses. Which teams actually need a Copilot Credits budget? Which tasks are worth spending those credits on? And most importantly, is that extra AI spend delivering enough value to justify the cost?
If you’re a Copilot admin, now is probably a good time to do a little housekeeping. Get familiar with your current subscription and what the changes mean for your organisation, then put sensible controls in place to manage who can access advanced AI and how much they can spend. Just as importantly, let your teams know what’s changing and what they will and won’t have access to. A little communication now could save you a flood of “What’s this new button?” and “Can I have access?” requests down the line.
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Notes:
The initial rollout excludes Australia, Belgium, Brazil, France, Germany, India, Italy, Korea, the Netherlands, Poland and Spain. Those markets are planned for a later phase in early 2027.
This post summarises information supplied and accessible on 12 November 2026. Release dates and information are subject to change.
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