The number of paid seats for Microsoft Copilot has surged, which is expected to reach 60 million by mid-2027.

According to recent reports, as of the end of June, the number of paid seats for Microsoft 365 Copilot has exceeded 30 million, a significant increase from more than 20 million three months ago. Around 10 million new seats were added this quarter, up from 5 million in the previous quarter, marking the fastest growth rate since the product's launch. At this momentum, Microsoft only needs to add around 7.5 million new seats each quarter by the end of June 2027 to hit the 60 million paid seat target, a pace roughly 25% lower than that of the quarter ending June 30.

This accelerated growth reflects Microsoft's well-considered product strategy: no longer simply attaching AI chatbots to familiar Office apps. On September 25, Microsoft released the redesigned Copilot platform, integrating chat, coding and autonomous agent capabilities into a unified interface. The improved apps embed the Copilot experience directly into Word, Excel and PowerPoint, showing that Microsoft's goal is to make the AI assistant the starting point for work, rather than an optional add-on.

Seat growth is translating into tangible financial results. In fiscal year 2026 ending June 30, Microsoft 365 commercial cloud revenue rose 17% year over year, while paid commercial seats only grew 6%. The company attributed the widening gap between revenue growth and seat growth to Copilot and higher-priced E5 offerings. Microsoft 365 commercial business (including products and cloud services) generated approximately $102 billion in full-year revenue, up 16% year over year. Management expects Microsoft 365 commercial cloud revenue to grow by roughly 16% on a constant currency basis, excluding abnormal factors from the same period last year.

"We expect Microsoft 365 commercial cloud revenue growth to accelerate this fiscal year," Microsoft CFO Amy Hood said during the July earnings call.

The scale of enterprise-level deals supporting seat expansion is also growing. According to CEO Satya Nadella, the number of customers with more than 50,000 Copilot seats has increased to more than 7 times that of the same period last year. HSBC alone has committed to purchasing 200,000 seats, highlighting that large financial institutions are moving from pilot projects to organization-wide deployment.

Even at 60 million seats, Copilot will only cover roughly one-eighth of Microsoft's paid Microsoft 365 commercial seats. As of last December, Microsoft reported that such commercial seats had exceeded 450 million, and this base is growing at a rate of about 6% per year. This means there is still huge room for Copilot penetration, especially after Microsoft integrates Copilot into broader software packages, such as the Microsoft 365 E7 suite released on May 1, which combines Copilot with the E5 version and Agent 365, a tool for managing AI agents.

The September redesign also enables Microsoft to better respond to competitors' moves. OpenAI launched its own unified AI app in July, while Meta has been developing an agent platform. Microsoft's response is to integrate the previously scattered Copilot products into a unified interface that automatically routes each request to the best available model it identifies, and selects between OpenAI and Anthropic's AI systems. Users can also manually select models, and Microsoft says it plans to add more vendors in the future.

Trust as the Core Challenge

As Microsoft pushes Copilot to achieve a higher degree of autonomy, Nadella points out that trust is the core issue determining whether the technology can be widely adopted by mainstream enterprises. This distinction is critical, because new AI software operates in a very different way from familiar chatbots. AI assistants wait for user requests, while AI agents, after receiving a goal, will follow a series of steps to achieve it incrementally, extracting data, interacting with software and making intermediate decisions in the process.

Nadella said in an interview with Yahoo Finance: "Trust will be the biggest issue we face." He noted that he has been thinking about whether users are willing to hand over login credentials to AI and allow it to perform actions on their behalf without strict supervision.

He asked: "When AI performs tasks autonomously, can I really safely give it all my credentials?" This concern is particularly prominent in enterprise environments, where the systems agents can access and the actions they can take are far more consequential than those involved in individual users handling personal tasks.

The redesigned platform addresses some of these issues through its architecture. The "Autopilot" module allows users to create persistent AI agents by naming them, assigning roles and setting goals. Each agent runs continuously in the cloud on the company's Microsoft 365 environment, with its own identity, memory and email address. Users can tag agents directly in Teams or Outlook to bring them into workflows.

Governance controls include explicit authorization required before agents can access new systems, audit logs of agent activities, and isolated execution environments. According to Fortune, these measures were partially developed in response to recent AI security incidents. However, risks are higher when agents run on enterprise networks and can access real data and real systems. Agents that can monitor and flag anomalies are useful, but agents that can send communications, modify records or perform actions on behalf of employees need to meet higher security standards.

Pricing Mechanism Shifts Towards Consumption Model

Microsoft is also adjusting how it charges for Copilot, moving to a so-called "seat + usage-based billing" model. The standard monthly subscription covers daily AI work, including conversational tasks and standard Copilot features, with a token limit that Microsoft says most users are unlikely to reach. Heavy users can switch to the usage-based billing model, which covers more features as well as longer-running, more system-intensive agent tasks. Administrators can set spending limits to keep costs within budget.

Nadella said the usage-based billing model will become increasingly important as AI companies gradually phase out the subsidized prices offered earlier to drive adoption. Running AI infrastructure is costly, and costs rise further when tasks require multiple model calls or continuous processing. The fixed subscription model spreads these costs across the user base, while the usage-based billing model recoups costs from the users who generate them.

The infrastructure burden is already reflected in Microsoft's financial statements. In the Productivity and Business Processes segment, where Microsoft 365 sits, cost of revenue rose 12% in fiscal 2026 due to growth in the number of users and usage supported by Copilot's AI infrastructure. Even so, the segment's operating income still grew 20%, indicating that revenue growth from Copilot adoption currently outpaces the associated costs.

Valuation and Outlook

As of the end of September, Microsoft's share price is around $516, equivalent to roughly 29 times expected earnings for the next 12 months. In comparison, the S&P 500 is trading at a forward price-to-earnings ratio of around 26 times. This premium indicates that the market's optimistic expectations for artificial intelligence are already priced into the stock, meaning any slowdown in Copilot's business momentum could put pressure on valuations.

At the current trend, Microsoft seems on track to hit its 60 million paid seat target by mid-2027. Microsoft only needs to maintain a slower pace of new seat additions than it has seen in recent periods. However, there are risks to this forecast. Weak performance for one or two quarters could push the milestone back by several months; the trust issues raised by Nadella could also slow enterprise adoption of the platform, as companies may hesitate to grant autonomous agents access to sensitive systems and credentials.

The competitive landscape adds another new variable. OpenAI's unified app and Meta's development of an agent platform show that competition for AI-augmented work is intensifying. Microsoft's advantage lies in its more than 450 million paid Microsoft 365 commercial seats, and the direct integration of Copilot into the productivity tools these users use every day.

The redesigned Copilot app will first roll out in the coming weeks via Microsoft's Frontier early access program, and its impact on seat sales may take some time to materialize. Over the next 12 months, whether Microsoft can convert its huge existing customer base into Copilot subscriptions will be a key metric to watch closely.

This article is from the WeChat Official Account "Tech Business", and is republished with authorization from 36Kr.