Microsoft 365 Copilot is an AI assistant woven directly into the Microsoft 365 apps most office workers already use — Word, Excel, PowerPoint, Outlook, and Teams. Instead of switching to a separate AI chat window, you give instructions inside the app you already have open, and Copilot responds using both its general knowledge and the documents, emails, and meetings stored in your organization.
How It Works
Copilot connects two components: a large language model (LLM) that understands and generates text, and Microsoft Graph — the API that reads your calendar, emails, documents, and Teams chats. When you type a prompt, Copilot pulls in relevant context from your work data, runs it through the LLM, and returns a response tailored to your specific situation.
Copilot only accesses data you already have permission to see. If a document is restricted to another team, Copilot won’t surface it in your responses. Your organizational data stays within your Microsoft 365 tenant — it doesn’t leave to train the underlying AI model or flow to other organizations.
What It Can Do
In Word: Draft, rewrite, or summarize documents based on your prompt — write a proposal based on this brief or make this section shorter and clearer.
In Excel: Analyze spreadsheet data, suggest formulas, and generate charts. Ask it to identify trends in this sales data and it highlights patterns and creates a visualization.
In PowerPoint: Build a presentation from a Word document or plain-text prompt. Create a 10-slide deck from this report produces formatted slides with speaker notes.
In Outlook: Summarize long email threads, draft replies in your tone, and get coaching on clarity before you hit send.
In Teams: Transcribe and summarize meetings in real time. After a call, ask What were the decisions made? or What action items were assigned to me? and Copilot returns a structured summary from the transcript.
How to Get Started
Copilot appears automatically in Microsoft 365 apps once your organization activates a license. If you manage IT for a small business, Microsoft’s setup guide walks through enabling it for users. For individuals exploring the product, a limited Copilot Chat is available on the web without a paid license — the full in-app integration requires a business subscription (see below).
New users may need to wait up to 24 hours and restart their apps for Copilot to appear after a license is assigned.
What It Costs
As of July 2026, per Microsoft’s pricing page:
- Microsoft 365 Business Standard with Copilot: $23.50/user/month (annual billing)
- Microsoft 365 Business Premium with Copilot: $32.00/user/month (annual billing)
- Add-on license for existing Microsoft 365 subscribers: $18.00/user/month through September 2026, rising to $21.00/user/month after that
- Enterprise add-on (requires Microsoft 365 E3 or E5): $30.00/user/month
There is no free trial for the full M365 Copilot integration.
In the News
Microsoft is doubling down on AI in the enterprise: the company recently launched a $2.5 billion Frontier Company initiative designed to help large organizations deploy AI at scale — Microsoft 365 Copilot is a core part of that strategy.
FAQ
Is Microsoft 365 Copilot the same as Copilot Chat (the free version)?
No. Copilot Chat (available at copilot.microsoft.com or in Teams without a license) draws on general web knowledge. Microsoft 365 Copilot is the paid version that connects to your organization’s documents, emails, and meetings.
Does Copilot use my company’s data to train its AI models?
No. Microsoft states that organizational data processed by Copilot is not used to train the underlying LLMs, and it remains within your Microsoft 365 tenant boundary.
Which Microsoft 365 apps include Copilot?
Word, Excel, PowerPoint, Outlook, Teams, Loop, Whiteboard, OneNote, and Forms. Coverage expands with each major Microsoft 365 update.
What if Copilot gives an incorrect answer?
Copilot can make mistakes — a known limitation of LLMs. Always verify figures, legal text, or factual claims it generates before acting on them, especially in Excel or formal documents.