Comprehensive Copilot Studio Licensing Guide

Microsoft’s Copilot Studio gives you powerful tools to build AI-driven agents, automate workflows, and integrate advanced models like GPT-4.1 and GPT-5. But its pricing can feel confusing—credits, packs, pre-purchase plans… what does it all mean?

We collaborated with the talented licensing expert Michael Morrison to create this guide.

Here’s the straightforward breakdown.

The Three Ways to Pay

1. M365 Copilot License

• $30/user/month

• Best if your users already need Microsoft 365 features plus Copilot assistance within Office apps.

• Not directly tied to Copilot Studio credit usage, but required if you want graph-grounded responses using Semantic Index.

2. Pay-As-You-Go (PAYG)

• $0.01 per Copilot Credit

• Ideal for small workloads, development, or unpredictable usage.

• You only pay for what you use.

3. Capacity Packs

• $200 per pack/month

• Equivalent cost: $0.08 per credit

• Best for organizations running heavier workloads or production bots.

• Cheaper than PAYG when you have consistent usage.

4. Pre-Purchase Plan (Annual Commitment)

• Tiered rates from $0.0095 → $0.0080 per credit

• Lowest cost per credit.

• Great for enterprises with predictable, large-scale demand.

  
  

How Credits Are Consumed

Credits are used whenever your agent processes text, images, or knowledge queries.Token-wise: 1 token ≈ ¾ of one English word.

Model Rates

Copilot Studio Feature Costs

Classic Answer — 1 Credit

Pulls answers from your uploaded data (FAQ, PDFs, etc.).Cheap, fast, not ideal for broad topics.

Generative Answer — 2 Credits

Uses broader LLM knowledge and the web.Better for dynamic questions or varied user language.

Agent Actions — GPT-5 Reasoning

Used when the agent:

• Queries knowledge sources

• Updates Dataverse

• Executes prompts

• Handles topic transitions

Higher cost because reasoning is more advanced.

Tenant Graph Grounding

Uses Microsoft Graph API to search across SharePoint and other tenant data.Requires:

• Semantic Index

• M365 Copilot license

Useful when data is scattered across sites.

AI Tools (Formerly AI Builder)

Used for tasks like:

• Reading receipts

• Extracting JSON

• Cleaning data

Agent Flow Actions

Think “Power Automate inside Copilot Studio.”Flows trigger on events and can use advanced AI actions, including Python.

Which Option Is Right for You?

• Testing or small bots → PAYG

• Consistent usage → Capacity Packs

• Enterprise, large volumes → Pre-Purchase Plan

• Heavy Microsoft Graph integration → M365 Copilot licenses required