Get users hooked with free access. Wait few years. Start having lawyers tweak terms of service. Charge corporate customers a shit ton of money as free users sell their junk. Yank “free” tier, with none to minimal notice due to ToS. Cite limited resource constraint. Stick previously free users with $99/month access. MSFT stock pumps hard for the next few years.
The fact that MS is doing this could be a sign that most people just don't find much utility in these AI tools. Like you said, they're trying to get people hooked. But if AI isn't any useful to people in the first place, this goes nowhere and they're still stuck with a low/decreasing amount of users.
Also, from a UX perspective, I feel an autocomplete-based UI encourages me to make sure the thing “I’m saying” is actually what I mean to say - ie, to not implicitly trust LLM hallucinations.
LLM-based generative text everywhere, in every app, could be useful, very straightforwardly integrated at an OS level into all text controls, something MS is well-poised to do, and “Copilot” a very good brand for that. (And I would be shocked if Apple and Google aren’t working on the same.)