Microsoft 365 Copilot Business: Could Default Pay-As-You-Go Billing Lead to Unexpected AI Costs?

Are you ready for usage-based billing? From mid-October, if you want to buy any Microsoft 365 Copilot Business licenses, you better be!

MC1476200 (Sept 21) outlines a plan for "Simplifying AI access" by automatically setting up a default spending policy for pay-as-you-go AI services alongside any new purchase of M365 Copilot Business.

First, this is for NEW purchases, it does not impact existing subscriptions and will only be implemented in environments where there isn't already a default spending policy.

It seems likely that if you make a Copilot Business purchase as a new subscription instead of being rolled into an existing one, you will end up with defaulted-on usage-based billing.

I have some concerns that haven't been addressed in information that has been shared:

1️⃣ Spending policies are group-gated not license-gated and the default policies generally apply to All Users out of the box. This implies that any new subscription would initiate creation of a spending policy that applies to All Users, including those with existing Microsoft 365 Copilot licenses and those without premium licenses for additional AI services.

2️⃣ It's not stated what dollar spending limit will be applied just "default spending limits". The minimum spending limit that appears available in my tenants to a new spending policy is 1,000 Copilot credits per member user (that's any user, not any Copilot licensed user). My best guess is that a tenant with 75 users buying 5 Microsoft 365 Copilot Business licenses gets a spending policy limited to 75,000 Copilot Credits ($750 per month) added by default.

3️⃣ It is not stated whether the default configuration will include per-user usage limits alongside per-policy limits. The minimum per user limit is 2,000 credits ($20), but it seems unlikely this will be set as part of the default policy as currently it is manually configured option.

4️⃣ It's not clear if a single group-scoped policy counts as the default policy for the new policy creation scenario. Since Spending Policy management first arrived, it was possible to scope the initially created policy and that would then exist as a single customized default. If this new arrangement requires there to be an All Users scoped policy this would be problematic in those scenarios.

5️⃣ Today, there are three services available to be billed under a Spending Policy; Cowork, Work IQ API, and Managed Apps. With this configuration, new options will light up by default as they arrive.

"We just bought Copilot licenses and we're unsure how to get set-up to give Microsoft even more money" is a problem I've never heard from a customer but Cowork being usage-based only does create a genuine friction in getting every option a license appears to buy lit up for users.

Anything that turns a $100/mo license purchase into a possible $850/mo spend needs to be taken seriously though. Consultants and MSPs advising customers on licensing need to be up to speed on this change.

First posted on Linkedin on 09/30/2026 → View Linkedin Post Here