Microsoft to Replace ‘Per User’ Billing With ‘Per Agent’ Pricing, Says Satya Nadella

Microsoft is getting ready to make a significant change to its software pricing strategy. As AI systems take on increasingly independent activities in the workplace, CEO Satya Nadella has revealed that the company is shifting from the conventional "per user" license approach to a "per agent" model. In an interview with the Dwarkesh Podcast, Nadella stated that Microsoft is changing from a firm that provides end-user products to one that offers infrastructure that supports AI agents that can finish tasks and make decisions on their own.

According to Nadella, Microsoft is redefining the reasoning for its current operations, which include Microsoft 365. Nadella thinks the suite, which currently brings in about INR 8 lakh crore a year, will eventually become the main setting in which AI agents work.

These agents will require identity management, archive systems, monitoring layers, secure storage, and discovery tools—all of which are included in Microsoft's current products. Nadella claims that because each AI agent would need its own computing power and security measures, this new foundation will expand more quickly than the number of human users.

Microsoft Already Started the Groundwork

The foundation has already been laid by Microsoft. Building on the free Copilot chat experience for Microsoft 365 users, it unveiled a pay-as-you-go approach for AI agents earlier this year. Businesses can now pay for the precise tasks that their AI agents complete rather than paying for seats or logins. Although other businesses in the sector, such as Google and Anthropic, also use usage-based invoicing, Nadella's remarks imply that Microsoft views "per agent" pricing as a key component of corporate software economics.

Nadella pushed businesses to consider the underlying systems that support both AI bots and human users rather than just tools. According to him, the key change is realising that every agent needs its own infrastructure, including identity layers, computation, security controls, and observability systems. He said that all of this would be combined into a brand-new end-user computing infrastructure company that will grow even if the number of human employees does not.

Microsoft Taking an AI Spin

Nadella also talked on the integration of AI agents into Microsoft's tools, using Excel Agent as an example. According to Nadella, the technology integrates intelligence directly into Office's middle layer, going beyond UI-level automation. Through markdown-based instruction, the agent has the ability to comprehend formulas, fix mistakes, and act like a highly skilled Excel analyst.

He pointed out that when developing such features, Microsoft can always choose the most economical model because model vendors compete with one another. Building AI bots that function as competent experts within Microsoft's tools is the aim, Nadella underlined. According to him, the AI agent is being developed as an analyst with an innate understanding of how to utilise the tools, and Excel was made for analysts. Microsoft anticipates that productivity software will develop in this way, with autonomous agents playing an active role in daily tasks.