New Cost Management policies for Microsoft 365 Copilot finally offer spending limits

Microsoft is rolling out a new Cost Management dashboard for Microsoft 365 Copilot services, currently supporting Copilot Cowork and Work IQ API, with additional services planned. This new dashboard finally supports monthly spending policies for the organization, service-specific, by user groups, or by users (planned). An administrator defines the maximum spending credits, not the monthly billing amount.

Limiting monthly spending caps this policy at the credit amount you set. Users assigned to this policy will lose access to agents and services when the limit is reached, until credits reset on the 1st of next month.

AI administrators need to activate the first spending policy at Microsoft 365 admin center > Copilot > Cost Management. The tenant needs at least one policy. After the policy is defined, administrators can create additional policies.

An AI administrator defines seven settings per policy:

1. The policy name. Administrators should create at least one “all users” policy.
2. The scope of the policy: “All users”, Entra ID groups, or individual users (planned for the future).
3. The Copilot services. Currently, administrators can select Copilot Cowork and Work IQ API. Additional services should be migrated to the cost management dashboard.
4. The billing method: Either an Azure subscription (Prepaid Azure subscriptions are not supported), Copilot Credit P3 reservations, or Copilot Credits prepaid capacity packs, if available in the tenant.
5. The monthly spending limit by credits.
6. The spending scope. Administrators can select the complete policy or by users.
   • By policy, all included users share a single combined limit.
   • By users, each user account can spend up to that limit.
7. Optional email alerts when the policy reaches a defined credit threshold.

Administrators can add additional policies after the first policy has been activated

Administrators also get a consumption overview. The Consumption tab provides detailed insight into Copilot Credits usage. It lets administrators break down consumption by user, group, service, or agent, spot the heaviest users and biggest cost drivers, and track usage trends over time. The goal is to give organizations the data they need to adjust policies and allocate budget more effectively, essentially a tool for understanding, monitoring, and controlling Copilot Credit spend.