Microsoft’s (NASDAQ: MSFT) upcoming June 1 GitHub Copilot pricing overhaul could become one of the most important tests of the AI boom so far.
By shifting the coding assistant towards token-based billing, the tech giant is attempting to make AI services more financially sustainable, but the move is exposing just how expensive heavy AI usage really is.
Screenshots shared across Reddit earlier in May suggest some users who currently pay $10 to $39 per month could face theoretical bills running into the hundreds or even thousands of dollars under the new pricing structure.
Microsoft may now be testing whether the AI industry can remain profitable once users are forced to pay something closer to the true cost of artificial intelligence.
GitHub Copilot pricing previews show users burning more than $25 in tokens for each $1
In a significant share of uploaded examples, users would see manifold cost increases should they remain at previous usage levels. For example, u/rostilos revealed that, after the change, they would be paying $1,063 for the amount of work they were, at the time of the post, doing for $39 per month.
Similarly, u/ChristianRauchenwald shared that the tokens they have burned for $105.19 would have, following the change, cost them $2,757, while u/Technical_Visit8084 revealed that they have burned nearly $767 worth of AI tokens on their $10 plan.
Still, the phenomenon is not universal, and several redditors revealed that their usage is generally aligned with their actual payments: u/SuccotashSorry3222’s screenshot indicates that after the change, they would be paying $10.96 for work previously done for $10.
Is AI blitzscaling about to backfire?
Microsoft’s decision arguably represents an attempt to improve the profitability of AI companies and to slowly accustom users to paying non-subsidized prices.
In fact, most companies involved with the technology have so far been attempting to conduct blitzscaling by offering their services at heavy discounts to rapidly increase market share.
Uber (NYSE: UBER) and various delivery apps have previously employed similar strategies and achieved great success that has held after they increased prices.
Notably, while previous examples might indicate that AI companies are well on their way to profitability, their approach was fundamentally different.
Subscriptions to models such as ChatGPT or Claude would be comparable to Uber only if the transportation app spent its initial years offering unlimited rides on a $10 or $20 monthly subscription.
Why Microsoft is changing the GitHub Copilot subscription
Under the circumstances, Microsoft’s decision regarding GitHub Copilot represents a major experiment in the sustainability of AI businesses in 2026.
On the one hand, the blue-chip technology giant is bound to either start making a profit or come closer to breaking even due to token-based pricing.
On the other hand, the number of users is likely to see a large drop, considering they would face either severe constraints on the use of AI or have to make room for a new monthly payment the size of the global average nominal GDP per capita.
Therefore, the crossroads could either rapidly deflate any talk of an ‘AI bubble’ or bring the ‘AI boom’ to a screeching halt, depending on whether they prove it is possible or impossible to make the service profitable without shedding users.
Did Anthropic just prove AI can be profitable without price increases?
Elsewhere, the Wall Street Journal reported on May 20 that Anthropic is expected to see its revenue exceed $10 billion in Q2 – more than doubling from Q1 – and see its first profit during the three-month period.
Though the development might appear to partially invalidate the importance of Microsoft’s pivot to token-based pricing for GitHub Copilot, the news came with several caveats.
The first and possibly biggest is that WSJ noted that the exact methods Anthropic used to reach the published figures are unclear, opening the possibility that the accounting was non-GAAP.
The bigger caveat, however, is that the report states that the profit might be ephemeral and that the AI company is likely to return to running at a loss through the rest of 2026 and for the entire year.
Anthropic agrees to pay $1.25 billion per month to SpaceX from July 2026
SpaceX’s initial public offering (IPO)-related filing might offer some insight into how Anthropic expects to achieve the milestone, according to the prominent industry critic Ed Zitron.
Elon Musk’s company revealed that the AI firm will be paying it $1.25 billion every month through May 2029 for compute, but simultaneously disclosed an unspecified discount through the windup period ending with Q2, 2026:
For example, in May 2026, we entered into Cloud Services Agreements with Anthropic PBC (“Anthropic”), an AI research and development public benefit corporation, with respect to access to compute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the customer has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee.
Therefore, it is unlikely the development reported in WSJ indicates that Anthropic has found a way to profitability without significantly increasing its prices.
Is Microsoft about to invalidate the massive AI infrastructure investment?
Lastly, the change due June 1 has uncomfortable implications for the vast expenditure on the data center and related infrastructure.
By press time on May 22, it is evident that global capacity has been substantially increased with technology firms reportedly displaying a voracious demand for supporting gear such as generators.
It is also, however, evident that the reality of construction is nowhere near matching the scale of the announcements, with a significant share of all projects unveiled finding themselves delayed or cancelled.
Additionally, it is difficult to find confirmation that allegedly operational AI data centers are fully online, with an apparent trend of companies declaring a facility is operational when only some of its segments – or phases – have been completed.
Could Microsoft crash Nvidia stock with GitHub Copilot subscription changes?
Not only is the matter of data centers problematic for the proverbial shovel-sellers of the boom – firms like Nvidia (NASDAQ: NVDA) or Micron (NASDAQ: MU) – as it is unclear if the hardware they sold was plugged in or remains boxed up in warehouses, but a drop in the number of users after the pivot to token-based pricing would signal the infrastructure expenditure was excessive and aimed at feeding non-existent demand.
Furthermore, the scale of investments is already somewhat dubious since, for example, xAI was able to provide some of its compute from both Colossus 1 and Colossus 2 – per the SpaceX IPO-related filing – to Anthropic despite running its own AI model.
Simultaneously, however, there remains a possibility that, should Microsoft see its profits soar, and the user base remain unaffected by the change to token-based pricing, the entire narrative about the AI revolution gets both validated and strengthened.
Featured image via Shutterstock
