Google is making AI free for all Workspace subscribers while hiking the solution’s subscription price from $12 to $14 per user per month.
Previously, Workspace users had to pay an extra $20 per user per month to access Google’s Gemini Business plan on top of the standard Workspace sub. Now, Workspace users can leverage Google’s AI across its raft of communications and collaboration offerings, including Meet, Docs, Gmail and Sheets.
The news comes as Microsoft has made a free version of Copilot available to all of its Microsoft 365 customers this week, 365 Copilot Chat, which also includes the option of supplementary pay-as-you-go agents.
Jerry Dischler, Google’s President of Cloud Applications, asserted to The Verge that Google’s AI stands out as the most vertically integrated product on the market. However, he emphasised that this integration only makes an impact if companies utilise the entire system—something that’s now within reach for more users, with AI being accessible to all paying subscribers.
“When we talk to businesses about AI, the main obstacle they face is cost,” Dischler noted. “That financial barrier often forces them to tread carefully, saying, ‘This is a significant investment—let’s prove it’s worth it.’ Now, with broader access to AI, they’re finally able to realise its value.”
Workspace AI delivers a suite of advanced tools intended to streamline work and boost productivity. Features include email summaries in Gmail, auto-generated designs for spreadsheets and videos, an AI-powered note-taker for meetings, and the versatile NotebookLM research assistant. Google stresses that the writing tools are seamlessly integrated across apps, ensuring consistent support throughout users’ workflows.
At the core of Workspace AI is the Gemini bot, which Google suggests is its most sophisticated AI yet. While it handles typical chatbot tasks, Gemini goes further by helping users locate information, search through personal files, and easily manage complex tasks.
The AI Race Is Heating Up This Week
It’s notable that Google and Microsoft have both decided to integrate free versions of their flagship AI solutions into their commercial offerings in the same week.
Microsoft highlights that its offering includes secure, free AI chat powered by GPT-4, seamlessly integrating agents into the chat experience for enhanced functionality. The tech giant outlined it also features robust IT controls designed to provide enterprise-grade data protection and streamline agent management, ensuring both security and efficiency at scale.
Microsoft is still preserving the premium $30 per user per month solution. Microsoft 365 Copilot Chat is free for Microsoft commercial customers but includes the pay-as-you-go option for supplementary agents, while Microsoft 365 Copilot is $30 per user per month.
Microsoft suggests that looking ahead, organisations can adopt a combination of Copilot Chat and Microsoft 365 Copilot.
Does AI Democratisation Hand Vendors A Competitive Advantage?
The question at the heart of Google and Microsoft’s decision to make AI free for their commercial subscribers is whether the long-term gain of making AI more widely accessible to a far larger audience and presumably boosting user adoption will offset the short-term financial hit of tearing down the AI paywall.
Granted, Google is increasing the cost of Workspace, but an extra $2 per user per month is hardly comparable to the $20 per user per month package.
Providing AI capabilities at no extra cost bolsters the value proposition of the Workspace and the Microsoft 365 ecosystems, attracting and retaining more users. It democratises access to advanced tools like Copilot and Gemini, empowering businesses and workers to improve productivity without financial barriers.
This move can lead to higher user engagement and ecosystem loyalty for Google and Microsoft while enabling smaller businesses and startups to access sophisticated AI capabilities without straining their budgets. Additionally, integrating AI directly into existing subscriptions simplifies adoption, as users don’t have to manage multiple plans or add-ons and can build that familiarity with AI as a practical tool rather than a daunting, abstract concept.
On the flip side, even putting aside the short-term fall in AI subscription-based revenues, making AI free may strain resources, potentially leading to slower rollouts or reduced performance due to increased demand. Furthermore, bundling AI tools with existing subscriptions risks alienating users who don’t need these features but still indirectly bear the associated cost through subscription fees.
Ultimately, Microsoft and Google appear to be prioritising accessibility and user satisfaction over immediate revenue with this strategic direction, but their long-term success depends on delivering reliable, high-quality AI experiences at scale.
