Microsoft Implements Paywall for AI Features in Notepad and Paint
Microsoft has made a significant shift in its software distribution model by introducing a paywall for the newly integrated artificial intelligence (AI) features within its widely used applications, Notepad and Paint. Consequently, this decision necessitates an active Microsoft 365 subscription for users who wish to utilise these advanced functionalities.
AI Features Locked Behind Microsoft 365 Subscription
The update introduces AI-driven tools, enhancing core apps like Paint and Notepad. Paint now includes an image generation tool, while Notepad offers AI-powered text rewriting. However, these features are only available to Microsoft 365 subscribers. Users without a subscription will see them greyed out, indicating their inaccessibility.
Microsoft’s decision is driven by the rising costs of deploying AI services, especially those that use large language models. Industry analysts see this as a strategic move. Ram Bala, an associate professor of business analytics at Santa Clara University, describes it as a “freemium” approach. The goal is to increase Microsoft 365 subscription numbers. Speaking to CNET, Bala emphasised that “Usage-based pricing is going to be much more prevalent for AI products where token usage is a major cost factor for companies.”
Industry-Wide Trend Towards AI Monetisation
This shift reflects a broader trend within the tech industry, with companies actively exploring diverse pricing models for AI-based services. The complexities of AI deployment are pushing companies towards more adaptable pricing structures.
Microsoft’s aggressive integration of AI across its product ecosystem, fueled by its substantial investment in OpenAI, has extended to platforms like Xbox and Windows Copilot. However, this push has not been without its challenges. The Copilot feature “Recall,” designed to enhance search through activity snapshots, has faced considerable scrutiny over privacy concerns. The potential for Recall to capture sensitive data has led to delays and widespread criticism.
