Microsoft’s Copilot Co‑work – its agentic AI assistant – is now generally available worldwide. It can break down complex jobs, retrieve company data, call tools and run multi‑step tasks in the cloud, far beyond simple chat. Early preview use by over half of the Fortune 500 showed huge productivity gains, but also rapidly rising costs because each task triggers many model, tool and retrieval calls. To control expenses, Microsoft switched Co‑work to usage‑based billing (pay‑as‑you‑go Copilot credits, 1 ¢ per credit, with volume‑discount P3 options) and provided light/medium/heavy task categories and user personas for cost estimation.
To lower costs further, Microsoft is evaluating a fine‑tuned DeepSeek V4 (or another open‑source) model hosted on Azure as an optional, lower‑price alternative to the current Anthropic/OpenAI models. This would not replace existing models but add a multimodel option, letting the platform route work to the most cost‑effective model for each task.
The move fits Microsoft’s broader strategy: it already sells Western AI models (via Azure) to Chinese firms such as ByteDance, Ant Group and Tencent, a business growing quickly despite being a small slice of total revenue. By potentially offering a Chinese‑origin model inside its Western Copilot product, Microsoft aims to bridge the U.S. and Chinese AI ecosystems as a unified enterprise AI platform.
Additionally, Microsoft launched Web IQ – a Bing‑powered grounding service optimized for AI agents that delivers fresh, low‑latency web data in a machine‑friendly format, claiming ~2.5× speed advantages. Together with security, plugins, audit logs and usage controls, Copilot Co‑work illustrates Microsoft’s effort to build a full‑stack enterprise AI agent platform that integrates models, search, tools, billing and governance.
1. Microsoft is exploring the use of a fine‑tuned DeepSeek V4 model (or another open‑source model) as a lower‑cost option for Copilot Co‑work.
2. Copilot Co‑work is Microsoft’s agentic version of Copilot, designed for long‑running tasks that break jobs into steps, use company data, call tools, work across files, run in the cloud, and return completed results.
3. Copilot Co‑work became generally available worldwide after a three‑month preview in Microsoft’s Frontier program.
4. More than half of the Fortune 500 companies used Copilot Co‑work during the preview period.
5. Example customers named in the preview include Accenture, Avanod, Advanced Local, Capital Group, LTM, Ordo, Qatar, and Zurich Insurance.
6. An engineering team used Copilot Co‑work to safely edit batch‑job spreadsheets and generate dependency flowcharts after each change.
7. Another team used Copilot Co‑work to compare nearly 4,000 files across two product versions.
8. A sales lead used Copilot Co‑work to analyze a stalled sales pipeline and received a ranked list of at‑risk opportunities with follow‑up actions.
9. Agentic AI can become expensive because it makes many model calls, tool calls, retrieval steps, and has long runtimes.
10. Microsoft moved Copilot Co‑work to usage‑based (pay‑as‑you‑go) billing due to high costs from heavy usage.
11. Copilot Co‑work requires a Microsoft 365 Copilot user subscription license plus usage measured in Copilot credits.
12. At general availability, the price is 1 cent per Copilot credit, with cost depending on model use, context retrieval, tool calls, and runtime.
13. Microsoft offers an alternative payment option called P3, where customers commit to a usage volume in advance for a discount.
14. Microsoft defined three task categories (light, medium, heavy) and four user personas (corporate knowledge workers, management/senior leaders, customer‑facing knowledge workers, technical workers) to help estimate costs.
15. Copilot Co‑work currently runs on Anthropic models (Opus 4.8 and Sonnet 4.6) and, in the Frontier program, on GPT‑5.5.
16. Microsoft’s own secure fine‑tuned model Co‑work 1 is planned for release soon, aimed at lower‑cost everyday tasks.
17. If Microsoft offers DeepSeek for Copilot Co‑work, it would be hosted fully on Azure, with customer data remaining in Microsoft’s cloud and covered by Azure enterprise security, compliance, and data‑residency controls.
18. DeepSeek would be offered as an optional model, not the default, for Copilot Co‑work.
19. Bloomberg reported that Microsoft sells AI models to Chinese companies via Azure, with ByteDance reportedly on track to spend >$1 billion per year on Microsoft AI and cloud services.
20. Other Chinese tech firms such as Ant Group, Mtoan, and Tencent are also significant spenders on AI models through Azure.
21. OpenAI and Anthropic do not directly sell their models to companies in China due to concerns about intellectual property theft, model misuse, and competitive improvement.
22. Because of its partnership with OpenAI, Microsoft sets its own policies for selling GPT‑series models via Azure in China.
23. Microsoft’s China business accounted for about 1.5 % of its overall revenue in 2024.
24. Azure AI revenue in China grew faster than in any other sales territory, roughly tripling in the fiscal year ending June 2025 after a 400 % increase the previous year.
25. Microsoft operates Azure data‑center regions in China near Beijing and Shanghai but does not host OpenAI models there due to IP‑theft concerns; Chinese customers access those models over the internet from facilities in other countries (e.g., Singapore).
26. OpenAI has privately complained to Microsoft that it is not doing enough to prevent Chinese firms from using OpenAI models to copy or improve their own models.
27. Microsoft uses automated monitoring to help prevent customers from using AI models to build competing products, but Chinese customers are not subject to heightened monitoring compared to others.
28. Microsoft introduced Web IQ, a Bing‑powered grounding system built specifically for AI agents that returns fresh web data optimized for machines.
29. Microsoft claims Web IQ is about 2.5 times faster than the next best alternative.
30. Web IQ is currently limited to selected Azure users in early access.
31. Copilot Co‑work runs in the cloud, connects to company data via Work IQ, follows Microsoft 365 security rules, and supports multiple models.
32. Administrators can control who uses Copilot Co‑work, set budgets, track spending, and limit usage.
33. Microsoft plans to add plugins, edge browsing, reporting, audit logs, e‑discovery, compliance tools, and data‑loss‑prevention features to Copilot Co‑work later.