Microsoft is expanding free AI capabilities across its core Office applications—Outlook, Word, Excel, and PowerPoint—with a series of new features set to roll out in early 2026. These updates will be available to all Microsoft 365 subscribers without requiring the $30-per-month Microsoft 365 Copilot add-on. The company first introduced the free Copilot Chat in September, and it’s now being enhanced to work across entire Outlook inboxes. This upgrade will allow users to leverage Copilot to manage their inbox more efficiently, including summarizing messages, identifying key action items, and preparing for meetings by pulling in calendar data and meeting details. This represents a major leap from the previous version, which was limited to analyzing individual email threads. Another key addition is the expansion of Agent Mode to Word, Excel, and PowerPoint for all Microsoft 365 subscribers. Originally launched as a premium feature, Agent Mode now enables users to generate complex documents, spreadsheets, and presentations with simple text prompts. In Excel, users will be able to choose between reasoning models from Anthropic and OpenAI, giving them greater flexibility in how data is processed and analyzed. In Word, the feature can draft and refine full documents, while in PowerPoint, it can update existing presentations with a company’s branded templates, create new slides, rephrase content, and insert relevant images. Microsoft plans to begin previewing these free AI enhancements for Microsoft 365 subscribers starting in March 2026. The company is also making a strategic shift to make powerful AI tools more accessible, following a recent move to include AI features in consumer Microsoft 365 plans without extra cost. In October, Microsoft also integrated its specialized Copilots for sales, service, and finance into the main Microsoft 365 Copilot subscription. In addition, Microsoft is launching Microsoft 365 Copilot Business next month, a new tier designed for small and midsize businesses. Priced at $21 per month—down from the standard $30—it will be available to organizations with fewer than 300 users, making advanced AI tools more affordable and accessible to a broader range of companies.