Microsoft may welcome its largest Copilot customer, with a single transaction involving millions of accounts

Microsoft may soon win a heavyweight client for its flagship AI product, Copilot.

According to sources familiar with the matter, Microsoft's Chief Commercial Officer Judson Althoff recently informed employees during an internal meeting that a major client with over 1 million Microsoft 365 licenses is about to purchase additional Copilot services for its employees.

How million-level clients will be billed is still undecided

It is currently unclear how far along the negotiations for this deal are, and it is uncertain whether the deal will ultimately materialize or if specific terms will change. Additionally, how this client will pay for Copilot may still be under adjustment. Microsoft typically sells software licenses on a "per user per month" basis, but this time it may adopt an emerging trend of usage-based billing.

Based on the current pricing of $30 per user per month for Copilot, if this client activates services for 1 million employees, it could potentially bring Microsoft approximately $360 million in annual revenue. However, considering the large order volume, even if Microsoft continues to charge "per head," such a client is unlikely to pay the full price.

Nevertheless, analysts say that adding 1 million Copilot users at once would still be a significant victory for Microsoft, helping to advance the widespread adoption of AI tools. Microsoft has made substantial investments in these new products but is still exploring how to achieve the most effective commercial returns. Some clients, competitors, and even Microsoft insiders remain skeptical about Copilot's capabilities and the evolving business model.

According to slides from a recent internal presentation at Microsoft, the company has developed a new plan to streamline and integrate its numerous AI products to simplify the sales approach to customers.

Is Amazon a potential client?

Media analysis indicates that it is currently unclear who this client planning to purchase Copilot on a large scale is, but there are only a handful of companies globally with a workforce of over a million employees.

For example, Amazon has over 1 million employees. However, an Amazon employee told the media that Amazon had previously advised employees to avoid using external AI tools, making it unlikely that they would adopt Copilot.

Media reports previously indicated that at the end of 2023, Amazon signed a five-year procurement agreement worth over $1 billion with Microsoft for Microsoft 365 office software services. The agreement includes providing approximately 550,000 Microsoft 365 E5 licenses for Amazon's corporate employees and 1 million M365 F5 licenses for frontline employees such as those in fulfillment centers.

According to an internal memo obtained by the media, Amazon employees will gradually begin to switch to Microsoft's cloud-based office software, including Outlook, Word, Excel, and PowerPoint, but this memo did not mention the Copilot service.

Strong financial report, stock price hits new high

Microsoft's latest financial report shows that the company has demonstrated strong growth momentum and stable demand in the cloud computing and AI services sectors, further solidifying its market position as a "stable oasis." In the face of risks such as tariffs and macroeconomic uncertainties, Microsoft remains relatively unaffected. At the same time, to cope with the high costs associated with AI, the company is also significantly laying off employees to control expenses.

Microsoft's stock price has continuously broken historical highs since last week, dipping 0.39% on Tuesday to $470.92. Since the low in April, the stock has risen over 30%. This round of increases has brought Microsoft more than $800 billion in market value growth, raising its total market capitalization to approximately $3.48 trillion, making it the largest in the world. Microsoft has risen 11% year-to-date, outperforming the Nasdaq 100 index.

Jim Awad, Senior Managing Director at Clearstead Advisors, stated, "Microsoft has a solid layout across its various product lines and possesses the true ability to monetize AI. I believe that looking back three to four years from now, Microsoft will be one of the companies that benefit the most from AI."