Alphabet CEO Sundar Pichai walks to lunch at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 12, 2023.
David Paul Morris | Bloomberg | Getty Images
Google plans to start charging large businesses $30 per month for each user of its artificial intelligence enhancements that are being added to Gmail and other productivity apps, the company said Tuesday.
The technology — called Duet AI — will cost just as much as Microsoft’s 365 Copilot enhancements, which could become available in the first half of next year. The two companies have been racing to add generative AI into more of their core products following the release of OpenAI’s ChatGPT chatbot late last year.
The fees are on top of what companies are already paying for their subscriptions to the productivity suites. Google says it’s allowing companies to join free trials before committing to the subscription. For smaller organizations and individual users, the company hasn’t finalized pricing, said Aparna Pappu, Google Workspace’s vice president and general manager.
“The list price we came up with was in consideration with customers’ willingness to pay for the enterprise value we’re going to bundle into it,” Pappu told CNBC in an interview.
Google began taking preorders for Duet AI for Google Workspace at the $30 per user price in May, but didn’t disclose it publicly, Pappu said. Microsoft then announced its pricing in July.
“We were a little surprised to see our friends in Redmond come up with the exact same pricing model that we had,” Pappu said. Microsoft is based in Redmond, Washington.
Google, which gets the majority of its revenue from internet search and other online ads, is less reliant than Microsoft on business software. Workspace revenue falls under Alphabet’s Google Cloud category, alongside Google’s cloud infrastructure. Together those units produced $8 billion in revenue in the second quarter. In the same period, Office products and cloud services generated $13.5 billion in revenue for Microsoft.
Google has been gaining ground. The company said Workspace now has 10 million paying customers, up from 9 million in March and 6 million in 2020. The company says more than a million people have tried the new AI capabilities through a “trusted tester” program since they were introduced earlier this year. Over 1,000 customers are now using the tools in a trial, Pappu said.
In Gmail and Google Docs, users can input a simple text prompt and tell Duet AI to produce a result. In Google Slides, images can be created by typing a few words of descriptive text. Duet AI can also help create a plan for a project in Google Sheets and take notes in Google Meet for those who can’t attend video calls.
Pappu said she recently asked Duet AI to generate text for a product positioning document using information from other sources, and to craft an illustration for a presentation. One early customer is lingerie brand Adore Me, where employees use Duet AI to prepare copy, a Google spokesperson said.
Microsoft has advertised some of these capabilities with its 365 Copilot. In May, the company announced a paid early access program for 600 clients.
More than 3 billion people around the world use Google Workspace. A consumer version of Duet AI for Google Workspace should become available “early next year,” Pappu said.
WATCH: Why Microsoft is struggling to close the gap between Bing and Google
