Alphabet CEO Sundar Pichai attends lunch at the Allen & Co. Media and Technology Conference on July 12, 2023 in Sun Valley, Idaho.
David Paul Morris | Bloomberg | Getty Images
Google The company plans to charge large businesses $30 a month for each user of its artificial intelligence extensions added to Gmail and other productivity apps, the company announced on Tuesday.
The technology – dubbed Duet AI – will cost just as much Microsoft's 365 Copilot improvements that could be available in the first half of next year. Following the release of OpenAI's ChatGPT chatbot late last year, the two companies have been in a race to integrate generative AI into more of their core products.
The fees are on top of what companies already pay for their productivity suite subscriptions. Google says it allows businesses to participate in free trials before committing to a subscription. For smaller organizations and individual users, the company hasn't set pricing yet, said Aparna Pappu, vice president and general manager of Google Workspace.
“For the list price, we took into account customers' willingness to pay for the enterprise value that we're going to pack into it,” Pappu told CNBC in an interview.
Google began taking pre-orders for Duet AI for Google Workspace in May, priced at $30 per user, but didn't publicly announce it, Pappu said. Microsoft then announced its prices in July.
“We were a little surprised to see that our friends in Redmond were developing the exact same pricing model we were,” said Pappu. Microsoft is based in Redmond, Washington.
Google, which derives the bulk of its revenue from web search and other online ads, relies less on enterprise software than Microsoft. Workspace revenue falls into Alphabet's Google Cloud category alongside Google's cloud infrastructure. Combined, these units generated revenue of $8 billion in the second quarter. Office products and cloud services generated $13.5 billion in revenue for Microsoft over the same period.
Google has gained ground. The company said Workspace now has 10 million paying customers 9 million in March and 6 million in 2020. The company says more than a million people have tried out the new AI capabilities since their launch earlier this year through a “trusted tester” program. More than 1,000 customers are now using the tools in a test, said Pappu.
In Gmail and Google Docs, users can type a simple text prompt and tell Duet AI to create a result. Images can be created in Google Slides by typing in 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 join video calls.
Pappu said she recently asked Duet AI to use information from other sources to generate text for a product positioning document and create an illustration for a presentation. One early customer is lingerie brand Adore Me, whose employees use Duet AI to create copy, a Google spokesman said.
More than 3 billion people around the world use Google Workspace. A consumer version of Duet AI for Google Workspace should be available “early next year,” Pappu said.
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