Microsoft 365 Copilot

See also: Artificial Intelligence Applications, Large Language Models, GPT-4, and OpenAI

Microsoft 365 Copilot is an artificial intelligence assistant developed by Microsoft that integrates large language models (LLMs) with the Microsoft 365 suite of productivity applications. In Microsoft's own words, it "combines the power of large language models (LLMs) with your data in the Microsoft Graph and the Microsoft 365 apps to turn your words into the most powerful productivity tool on the planet."^[1] Announced on March 16, 2023,^[1] and made generally available to enterprise customers on November 1, 2023,^[3] the product combines models from OpenAI and, since September 2025, Anthropic with organizational data accessed through the Microsoft Graph to help users draft documents, analyze data, create presentations, manage email, summarize meetings, and automate repetitive tasks.^[1][36] Microsoft 365 Copilot operates across Word, Excel, PowerPoint, Outlook, Teams, OneNote, Loop, and other Microsoft 365 applications.^[21][24]

Since its launch, the product has undergone substantial expansion. The OpenAI model backbone has moved from GPT-4 through GPT-4o and GPT-5 to the GPT-5.4 generation and beyond,^{[1][6][12][17][47]} and Anthropic's Claude models were added starting with the Researcher agent in September 2025.^[36] The first-party agents Researcher and Analyst were introduced in 2025,^[9] Copilot Cowork, a service for delegating long-running, multi-step tasks, was announced on March 9, 2026 and became generally available on June 16, 2026,^[18][41] and the first "Autopilot" agent, Microsoft Scout, entered preview in June 2026.^[42] On Microsoft's January 28, 2026 earnings call the company reported 15 million paid Microsoft 365 Copilot seats; by the July 29, 2026 call it reported more than 30 million.^[33][35] On September 25, 2026 Microsoft announced a rebuilt Copilot app organized around Home (Chat and Cowork), Code, and Autopilot, which chief executive Satya Nadella called "our biggest update to Copilot to date."^[46][48]

History and timeline

Announcement (March 2023)

Microsoft first announced Microsoft 365 Copilot on March 16, 2023, in a post on the Official Microsoft Blog by Jared Spataro.^[1] The announcement showcased how Copilot could work across Word, Excel, PowerPoint, Outlook, and Teams.^[1] Alongside the product announcement, Microsoft introduced Business Chat (later renamed Microsoft 365 Chat), a conversational interface that works across "your calendar, emails, chats, documents, meetings and contacts."^[1][3]

At launch, Nadella framed the product as a turning point in computing, stating: "Today marks the next major step in the evolution of how we interact with computing, which will fundamentally change the way we work and unlock a new wave of productivity growth. With our new copilot for work, we're giving people more agency and making technology more accessible through the most universal interface," which he identified as natural language.^[1]

At the time of the announcement, Microsoft emphasized that Copilot was grounded in each organization's business data through the Microsoft Graph, so that responses would draw on the user's documents, emails, calendar, chats, meetings, and contacts.^[1] Microsoft described the system as combining LLMs, "including GPT-4," with the Microsoft 365 apps and business data, and said it was guided by its AI principles and Responsible AI Standard.^[1]

Early Access Program (May 2023)

In May 2023, Microsoft introduced the Copilot for Microsoft 365 Early Access Program, an invitation-only, paid preview.^[2] Before this broader preview launched, Microsoft had been testing Copilot with 20 enterprise customers since March 2023, including companies like Goodyear, General Motors, The Walsh Group, and Avanade.^[2] The Early Access Program rolled out to an initial wave of 600 customers worldwide.^[2]

General availability (November 2023)

On September 21, 2023, Microsoft announced that the product, then branded Copilot for Microsoft 365, would become generally available for enterprise customers on November 1, 2023, at $30 per user per month.^[3] By then it was already used by "tens of thousands of enterprise users" in the Early Access Program, including at Visa, General Motors, KPMG, and Lumen Technologies.^[3] The same announcement introduced Microsoft 365 Chat as the renamed and expanded Business Chat.^[3] Microsoft removed the original 300-seat minimum purchase requirement in January 2024, and the product went back to the Microsoft 365 Copilot name in September 2024.^[26]

Copilot Studio launch (November 2023)

At Microsoft Ignite in November 2023, Microsoft introduced Copilot Studio, a low-code tool to customize Copilot for Microsoft 365 and build standalone copilots.^[4] Copilot Studio let enterprises connect Copilot to other data sources through plugins and custom GPTs, including systems such as SAP, Workday, and ServiceNow.^[4] Autonomous agent capabilities in Copilot Studio became generally available later, in March 2025.^[9]

Wave 2 update (September 2024)

On September 16, 2024, Microsoft announced "Wave 2" of Microsoft 365 Copilot, which introduced several features across the suite:^[6]

• Copilot Pages, a dynamic, persistent canvas for multiplayer AI collaboration
• Copilot in Excel with Python for advanced data analysis, including forecasting and machine learning (in public preview)
• Copilot agents, described as generally available, plus a simplified agent builder
• A narrative builder for PowerPoint to help construct logically structured slide decks
• Prioritize my inbox in Outlook, which summarizes email and explains why each message was prioritized
• Reasoning in Teams that processes both the meeting transcript and meeting chat simultaneously

The Teams transcript-and-chat feature was generally available in September 2024, Copilot Pages was due to reach general availability later that month, and Outlook's Prioritize my inbox was scheduled for public preview starting in late 2024.^[6] Microsoft also said that with GPT-4o and improved orchestration, Copilot responses had become more than two times faster on average.^[6]

Consumer Copilot Labs and Vision (October to December 2024)

On October 1, 2024, Microsoft introduced Copilot Labs, an early-access program for subscribers to the consumer Copilot Pro plan, rather than a Microsoft 365 Copilot feature.^[5] Its first feature was Think Deeper, which used "the very latest reasoning models" for complex problems, and it also trialed Copilot Vision, which lets Copilot understand the page a user is viewing in Microsoft Edge.^[5] Microsoft said that in the preview none of the content processed by Vision would be stored or used for training.^[5] On December 5, 2024, Copilot Vision entered preview for a limited number of Copilot Pro subscribers in the United States through Copilot Labs.^[7] These consumer features are covered in the Microsoft Copilot article.

Copilot Chat and pay-as-you-go agents (January 2025)

On January 15, 2025, Microsoft introduced Microsoft 365 Copilot Chat, which adds pay-as-you-go agents to the existing free chat experience for Microsoft 365 commercial customers.^[8] Copilot Chat, built on GPT-4o, provided web-grounded chat, file uploads, Copilot Pages, and image generation without the $30 per user per month Microsoft 365 Copilot license, while agents in Copilot Chat were "priced on a metered basis."^[8] Microsoft positioned the paid Microsoft 365 Copilot license as including everything in Copilot Chat plus grounding in work data, Copilot in the Microsoft 365 apps, and agent access.^[8]

Researcher and Analyst agents (March-June 2025)

On March 25, 2025, Microsoft announced two first-party reasoning agents: Researcher and Analyst.^[9] Both agents began rolling out in April 2025 to customers with a Microsoft 365 Copilot license through the new Frontier early-access program.^[9][11] They became generally available to all Copilot licensees on June 2, 2025.^[10] (Details on capabilities are covered in the dedicated sections below.)

Copilot Studio adoption (May 2025)

At Microsoft Build in May 2025, Microsoft said that more than 230,000 organizations, including 90% of the Fortune 500, used Copilot Studio to create and customize agents, and that customers had created more than 1 million custom agents across SharePoint and Copilot Studio in the previous quarter.^[37]

GPT-5 integration (August 2025)

On August 7, 2025, Microsoft began rolling out GPT-5 across Microsoft 365 Copilot and Copilot Studio on the day of the model's release.^[12] Copilot used GPT-5's real-time router to choose between a high-throughput model for routine questions and a deeper reasoning model for complex prompts.^[12] Licensed users received priority access, and users without a license were to receive standard access in the following weeks.^[12]

Anthropic models (September 2025)

On September 24, 2025, Microsoft announced that it was adding Anthropic models to Microsoft 365 Copilot. The Researcher agent could be powered by either OpenAI's deep reasoning models or Claude Opus 4.1, and Claude Sonnet 4 and Claude Opus 4.1 became model options in Copilot Studio.^[36] Claude in Researcher rolled out through the Frontier program to licensed customers who opted in, and Microsoft noted that Anthropic models were "hosted outside Microsoft-managed environments and subject to Anthropic's Terms of Service."^[36]

Ignite 2025 and the Frontier Firm vision (November 2025)

At Microsoft Ignite 2025, the company described "Frontier Firms" as organizations that are "human-led and agent-operated."^[13] Key announcements included Work IQ, described as the intelligence layer that enables Copilot to "know you, your job, and your company inside and out"; Word, Excel, and PowerPoint agents in chat (via the Frontier program) alongside Agent Mode in the Office apps; and Agent 365, a control plane for managing and securing AI agents.^[13] Agent Mode in Word became generally available, Agent Mode in PowerPoint became available via Frontier, and Agent Mode in Excel let users choose between Anthropic and OpenAI reasoning models.^[13] Microsoft also said that more than 90% of the Fortune 500 used Microsoft 365 Copilot, and announced Microsoft 365 Copilot Business for organizations with fewer than 300 users at $21 per user per month starting in December 2025.^[13]

GPT-5.2 and pricing changes (December 2025)

GPT-5.2 became available in Microsoft 365 Copilot on December 11, 2025, combining GPT-5.2 Thinking for complex problems and GPT-5.2 Instant for everyday writing and translation.^[15] A week earlier, on December 4, 2025, Microsoft announced list price increases for Microsoft 365 suites effective July 1, 2026, including Microsoft 365 E3 from $36 to $39 per user per month and Microsoft 365 E5 from $57 to $60.^[14]

Wave 3 and Copilot Cowork (March 2026)

On March 9, 2026, Microsoft announced Wave 3 of Microsoft 365 Copilot alongside Copilot Cowork.^[18] Working with Anthropic, Microsoft brought "the technology that powers Claude Cowork" into Microsoft 365 Copilot.^[18] Cowork lets users describe an outcome; it turns the request into a plan that continues in the background, with checkpoints at which the user can confirm progress, make changes, or pause execution.^[19] Cowork was first tested with a limited set of customers as a research preview and became available through the Frontier program on March 30, 2026.^[19][20] Wave 3 also introduced Microsoft 365 E7, "The Frontier Suite," available for purchase from May 1, 2026 at a retail price of $99 per user per month, which includes Microsoft 365 Copilot, Agent 365, Microsoft Entra Suite, and Microsoft 365 E5.^[18] Agent 365 was also scheduled to become generally available on May 1, priced at $15 per user per month.^[18]

GPT-5.4 and spring 2026 updates

In early March 2026, GPT-5.3 Instant and GPT-5.4 Thinking became available in Microsoft 365 Copilot and Copilot Studio, with priority access for Microsoft 365 Copilot users and standard access for Copilot Chat users.^[15][17] On March 18, 2026, Microsoft updated its December pricing announcement to note that Copilot Chat had gained inbox and calendar awareness and access to the Word, Excel, and PowerPoint agents.^[14] The April 2026 update added a Claude model option in Copilot in Word, image model choice (GPT-Image, Flux, or Auto) in PowerPoint, and an Agent Builder workflow for submitting agents for administrator approval before they are published to the organization's Agent Store (rolling out in May 2026).^[21]

Scout and Cowork general availability (June 2026)

On June 2, 2026, Microsoft introduced "Autopilots," which it described as "always-on agents that work autonomously, with their own identity, and act on your behalf," and Microsoft Scout, its first Autopilot agent, built on OpenClaw open-source technology.^[42] Scout was offered as an experimental release through Frontier and in private preview to a select group of customers.^[42] On June 16, 2026, Microsoft made Copilot Cowork generally available worldwide to Microsoft 365 Copilot customers, with usage-based billing.^[41]

Microsoft Copilot app rename (August 2026)

In August 2026 Microsoft began merging its consumer Copilot app and the Microsoft 365 Copilot app into a single app called Microsoft Copilot, with a new icon; the commercial web address moved from m365.cloud.microsoft to copilot.cloud.microsoft.^[44][45] GeekWire reported that for commercial users the changes were mostly cosmetic, and that the merger laid the groundwork for a Copilot "Super App."^[45] The paid license continued to be sold as Microsoft 365 Copilot.^[51]

The new Copilot with Home, Code and Autopilot (September 2026)

On September 25, 2026, Microsoft announced a rebuilt Copilot app with three new capabilities (Home, Code, and Autopilot), Office in Copilot, and previews of Today and @Copilot in Teams.^[46] This release is described in its own section below.

The new Copilot (September 2026)

On September 25, 2026, Microsoft announced what Jared Spataro, chief marketing officer for AI at Work, called "the new Copilot."^[46] In a post on X the same day, Satya Nadella wrote: "We're building Copilot as a new OS for work that spans every model, every form factor, and every task," and called the release "our biggest update to Copilot to date."^[48] Nadella's post listed four pieces: Autopilot ("proactive and long-running agent built for the enterprise"), Code ("build apps with Copilot, hosted inside your company's tenant"), Home ("Chat + Cowork together"), and Office ("now fully embedded in Copilot").^[48] Microsoft's blog groups the same features as three new capabilities in the Copilot app (Home, Code, and Autopilot), with Office in Copilot built into Home.^[46]

Components

As of September 25, 2026, the components and their stated availability were:

Microsoft's blog gives two slightly different timings for Code: its opening says Home and Code will start rolling out in Frontier "in the coming weeks," while the Code section says Code "is rolling out to Frontier at the end of the month."^[46] Microsoft said that "coming soon" users will not need to choose a mode, because Copilot will route work to Chat, Cowork, or Code as appropriate.^[46]

Autopilot

Autopilot is the renamed Microsoft Scout.^[46][42] Microsoft describes it as watching channels, following up on threads, running recurring work, and picking a project back up days later "without waiting for a prompt," with an example of running a supplier review process from scheduling through follow-ups.^[46] It lives in the customer's tenant, is built on Microsoft IQ, and appears in Teams, Outlook, chats, channels, and documents, where users can @mention it "with permissions, audit and governance behind it."^[46] Nadella told investors on July 29, 2026 that Microsoft had introduced Autopilots that quarter, "including an always-on personal agent powered by OpenClaw," and that it would bring Copilot experiences, including Code, together in one "super app" spanning consumer and commercial in the following quarter, which ended in September 2026.^[35]

Platform additions

The same announcement included several supporting pieces:^[46][50]

• Microsoft Copilot Managed Runtime, hosting infrastructure that lets code run inside a company's Microsoft 365 tenant boundary under IT governance, entered public preview. Microsoft said it already powers apps built in Cowork, Code, and Copilot Studio, and that it is opening the runtime to third-party and professional developers.^[46][50]
• Fabric IQ brings context from customer data, including Power BI semantic models, into Copilot; it was generally available in Chat and Cowork on September 25, with Code integration coming through Frontier.^[46]
• Grounding in Dynamics 365 and Power Platform data and workflows was rolling out in public preview over the following month.^[46]
• A plugin registry that brings Microsoft, partner, and custom plugins into one catalog was rolling out, with general availability across surfaces expected in the following weeks.^[46]

Pricing model

Microsoft paired the release with a change in how it describes Copilot pricing. Everyday use (Copilot Chat and Copilot in Word, Excel, PowerPoint, Outlook, and Teams, with model selection) is covered by the per-user Copilot user subscription license (USL), while Cowork, Code, Autopilot, other long-running agentic capabilities, and frontier models that Microsoft calls "Astra and Fable" run on usage-based billing (UBB) in Copilot Credits.^[46][47] Microsoft's pricing post says UBB "builds on the USL, which is required to access these capabilities," that GPT-5.6 and Sonnet 5 are included in the USL, and that "new models like Opus 5 will be included with limits."^[47] For enterprise customers, UBB services stay off until an administrator creates a spending policy in the Microsoft 365 admin center.^[47] New FinOps controls extended cost management to Code and Managed Runtime, with Copilot Studio agents planned for October 2026, and let end users see credit usage and balances in Copilot.^[46][47]

Coverage

The Next Web, citing GeekWire, reported that Nadella first promised a Copilot "super app" at Microsoft Build in June 2026 and that Autopilot grew out of Microsoft's experiments with OpenClaw.^[49] It also cited CNBC as reporting that fewer than 7% of Microsoft's more than 450 million commercial seats had licenses for the Copilot add-on, and that Jacob Andreou, the executive vice president who leads Copilot, acknowledged that adding coding to the app was Microsoft catching up.^[49] Microsoft said it would share more at Microsoft Ignite, November 17-20, 2026, in San Francisco and online.^[46]

Architecture

Microsoft 365 Copilot works inside the Microsoft 365 service boundary of a customer's tenant. Microsoft's documentation says that operating inside that boundary "doesn't grant Copilot tenant-wide visibility," because data access is always scoped to the signed-in user's permissions.^[23]

Processing pipeline

Microsoft's architecture documentation describes the flow of a prompt as follows:^[23]

1. A user enters a prompt in Copilot in a Microsoft 365 app.
2. Copilot preprocesses the prompt through grounding, accessing Microsoft Graph in the user's tenant. The grounded prompt can include text from input files or other content Copilot discovers.
3. Copilot sends the grounded prompt to the LLM, which generates a contextually relevant response. Data used to generate responses is encrypted in transit.
4. Copilot returns the response to the app and the user. The interaction is stored in the user's Copilot chat history, which the user can review or delete.

Copilot honors Conditional Access policies and multifactor authentication configured for the tenant.^[23]

Language model evolution

Microsoft 365 Copilot has used a succession of models since its launch. The table below summarizes the progression:

Microsoft describes this as a deliberate multi-model strategy, stating in its Wave 3 announcement: "It's this multimodel advantage that makes Copilot different. Your work is not limited by one brand of models. Copilot hosts the best innovation from across the industry and chooses the right model for the job regardless of who built it."^[18] As of April 2026, Copilot in Word also offered a Claude model option alongside OpenAI models.^[21]

Microsoft Graph integration

The Microsoft Graph serves as the data backbone for Copilot, providing access to user data such as emails, chats, and documents that the user has permission to access.^[23] Copilot only accesses data that an individual user is authorized to access, based on existing Microsoft 365 role-based access controls.^[23]

Work IQ, announced at Ignite 2025, extends this grounding. Microsoft describes three parts: work data (emails, files, meetings, and chats), memory (a user's "style, preferences, habits, and workflows"), and inference that combines the two to "predict the next best action."^[13] Microsoft's pricing page describes Work IQ as including Microsoft 365 content and metadata, line-of-business data ingested through Copilot connectors, a semantic index, and Copilot Memory.^[24] In the September 2026 announcement Microsoft described Copilot as grounded in "Microsoft IQ, the unified intelligence platform for enterprise AI across your Microsoft stack."^[46]

Data protection and model training

Microsoft 365 Copilot inherits the security, compliance, and privacy policies already configured in an organization's Microsoft 365 tenant, and Microsoft states that "Copilot LLMs are not trained on your tenant data or your prompts."^[1]

• Tenant data and prompts are not used to train the underlying LLMs.^[1]
• Two-factor authentication, compliance boundaries, and existing privacy protections apply.^[1]
• Copilot enforces existing Microsoft 365 permissions and sensitivity labels.^[18]
• Copilot interactions are audited by Microsoft Purview; Microsoft said 24 billion Copilot interactions were audited by Purview in the quarter ending December 2025.^[33]
• Work IQ for custom agents respects existing permissions, sensitivity labels, compliance controls, audit, logging, monitoring, and policy enforcement.^[13]

Pricing and licensing

Microsoft 365 Copilot follows an add-on licensing model, requiring users to already hold a qualifying Microsoft 365 plan.^[24][51] As of September 2026, the enterprise license lists at $30 per user per month paid yearly, or $31.50 paid monthly with an annual commitment.^[51]

Copilot Cowork requires the Microsoft 365 Copilot user subscription license, and Cowork usage is then billed per task based on model use, context retrieval, tool calls, and runtime. Customers can pay as they go at $0.01 per Copilot Credit or commit to a usage volume in advance (P3) for a discount.^[41] Microsoft 365 suite list prices rose on July 1, 2026: E3 from $36 to $39, and E5 from $57 to $60.^[14]

For context, CNBC reported that E7 costs $99 per user per month compared with $60 for E5 after the price increases, and that E7 includes the $30 Copilot license, $12 of Entra identity tools, and the $15 Agent 365 product.^[22]

Features by application

Microsoft 365 Copilot provides tailored AI capabilities within each Microsoft 365 application. The following table summarizes selected features in each app.

Copilot in Word

Copilot in Word generates first drafts from a natural language prompt, and with Wave 2 it could reference web data and work data such as Word, PowerPoint, PDF, and encrypted documents, as well as emails and meetings.^[6] At Ignite 2025, Agent Mode in Word became generally available, allowing users to work iteratively with Copilot on a document.^[13] In Wave 3, Microsoft said that "Agent Mode" was no longer a separate mode but core to how Copilot works in the apps, and that these experiences were generally available in Excel and Word.^[18] In April 2026, Copilot in Word added a Claude model option, letting users choose an Anthropic model alongside OpenAI options.^[21]

Copilot in Excel

Copilot in Excel became generally available in September 2024 with support for formulas such as XLOOKUP and SUMIF, conditional formatting, charts, and PivotTables.^[6] Copilot in Excel with Python, announced in Wave 2 in public preview, lets users run forecasting, risk analysis, machine learning, and visualization through natural language.^[6] In a feature rolling out in May 2026, Copilot can apply Python while making edits in a workbook.^[21]

In November 2025, Agent Mode in Excel let users choose between Anthropic and OpenAI reasoning models.^[13] In February 2026, Microsoft retired the separate App Skills entry points in Excel and consolidated their editing capabilities into Copilot Chat and Agent Mode, which it said had become generally available earlier that year; Copilot Chat remained the place to use agents such as Analyst.^[39] The Advanced Analysis mode that used Python in Excel was not yet available in the replacement experiences at that time.^[39]

Copilot in PowerPoint

Copilot in PowerPoint generates presentations from a prompt. The narrative builder, made generally available in Wave 2, helps users build an outline and a first draft, and Brand manager lets Copilot use a company's branded template.^[6] In April 2026, users gained a choice of image model (GPT-Image, Flux, or Auto) and the ability to ground slides in public webpages.^[21] In the September 2026 announcement, Microsoft said PowerPoint "now keeps decks on-brand automatically."^[46]

Copilot in Outlook

In Outlook, Copilot summarizes long email threads and drafts suggested replies.^[1] The Prioritize my inbox feature, introduced in Wave 2, analyzes the inbox based on the content of email and the context of the user's role, generates a summary of each email, and explains why it prioritized the message.^[6] In March 2026, Copilot in the new Outlook began writing first drafts directly in the message canvas and refining them with the user.^[21] Copilot Chat gained inbox and calendar awareness by March 2026.^[14]

Copilot in Teams

Copilot in Microsoft Teams can summarize key discussion points during a meeting, "including who said what and where people are aligned and where they disagree," and suggest action items in real time.^[1] With Wave 2, Copilot in Teams gained the ability to reason across both the meeting transcript and the meeting chat.^[6] At Ignite 2025, Microsoft made the Facilitator agent in Teams generally available and put Teams Mode for Microsoft 365 Copilot, which turns one-to-one Copilot chats into group chats, into public preview.^[13] In 2026, Microsoft added Copilot call delegation and consecutive interpretation in Teams Interpreter,^[21] and in September 2026 it announced @Copilot in Teams channels, group chats, and meetings in private preview.^[46]

The Workflows agent, introduced in October 2025 via the Frontier program, automates tasks on a schedule or in response to events.^[13]

Copilot in OneNote

Copilot Notebooks let users gather notes, files, and Copilot conversations into a workspace. In April and May 2026, Microsoft rolled out the ability to reference SharePoint content and OneNote notebooks, generate Word documents or PowerPoint presentations from notebook content, share a notebook with a Microsoft 365 Group, and explore content with mind maps; multimodal capture in the OneNote iOS app turns audio, images, and typed notes into a Copilot Page.^[21]

Copilot Pages

Copilot Pages, announced during the Wave 2 event in September 2024, is a dynamic, persistent canvas designed for what Microsoft calls "multiplayer AI collaboration."^[6] Pages takes ephemeral AI-generated content and makes it durable, so that users can edit it, add to it, and share it, working with teammates and Copilot in real time.^[6]

At the Wave 2 launch, Microsoft said Pages would also come to the more than 400 million people with access to the free Microsoft Copilot when signed in with a Microsoft Entra account.^[6] Copilot Pages was included in Copilot Chat when it launched in January 2025.^[8] In April 2026, users gained the ability to use Work IQ to generate interactive visuals and apps in Pages and to open them in App Builder.^[21]

Copilot Studio

Copilot Studio is Microsoft's low-code platform for building and customizing AI agents.^[4] Originally announced at Microsoft Ignite in November 2023, the platform has expanded significantly through 2025 and 2026.^[4][9]

Core capabilities

Copilot Studio allows organizations to:

• Build standalone agents and customize Microsoft 365 Copilot with their own scenarios.^[4]
• Connect agents to other data sources and systems of record through pre-built or custom plugins.^[4]
• Build autonomous agents that act independently and initiate events (generally available since March 2025), and use deep reasoning and agent flows.^[9]
• Publish agents to external channels such as websites, apps, or social platforms with a standalone plan.^[52]

Model flexibility

Since September 2025, Copilot Studio has offered Anthropic models (initially Claude Sonnet 4 and Claude Opus 4.1) alongside OpenAI models, and makers can mix models from Anthropic, OpenAI, or the Azure Model Catalog in multi-agent systems.^[36] At Ignite 2025 Microsoft added GPT-5.1.^[13] Wave 3 highlighted updates that help organizations evaluate agent quality and coordinate multiple agents.^[18]

Licensing

Copilot Studio usage is billed in Copilot Credits, available through pay-as-you-go meters, prepurchase plans, and prepaid Copilot Credit pack subscriptions. Starting September 1, 2025, the common currency for agents changed from messages to Copilot Credits, with no change in the quantity per prepaid pack or the pay-as-you-go rate.^[52] Microsoft's pricing page says the pre-purchase plan can save up to 20%.^[52]

Adoption

As of May 2025, more than 230,000 organizations used Copilot Studio.^[37] On the January 2026 earnings call Microsoft said that more than 80% of the Fortune 500 had active agents built with its low-code and no-code tools, and in April 2026 it said nearly 90%.^[33][34] The Agent Builder approval workflow, rolling out in May 2026, lets administrators review agents before they are published to the organization's Agent Store.^[21]

Researcher agent

Researcher is one of two first-party reasoning agents introduced by Microsoft in March 2025 and made generally available on June 2, 2025.^[9][10] It handles multi-step research tasks that combine internal organizational data with external web sources.^[9]

Capabilities

Researcher combines OpenAI's deep research model with Microsoft 365 Copilot's orchestration and deep search capabilities.^[9] It can:

• Reason over the user's work data: emails, meetings, files, chats, and more.^[9]
• Search the public web.^[9]
• Integrate data from third-party connectors including Salesforce, ServiceNow, and Confluence, and pull in data through other agents such as Sales Chat.^[9][11]

In its March 2025 technical post, Microsoft reported that Researcher's implementation, using a version of OpenAI's then-upcoming o3 model trained for research tasks, achieved 26.6% accuracy on Humanity's Last Exam and an average of 72.6% on the GAIA benchmark.^[38] At general availability, licensed users could run up to 25 combined Researcher and Analyst queries per month, and Researcher supported 37 languages.^[10] Since September 2025, users can choose Claude Opus 4.1 to power Researcher instead of OpenAI's deep reasoning models.^[36]

Multi-model intelligence

On March 30, 2026, Microsoft introduced two multi-model capabilities in Researcher: Critique and Council.^[16][20] Critique separates generation from evaluation: one model plans the task, iterates through retrieval, and produces a draft, while a second model reviews and refines it "as an expert reviewer" before the final report.^[16] Microsoft reported that Researcher with Critique scored 7.0 points (13.88%) higher than the best system in the DRACO deep research benchmark paper, using GPT-5.2 as the judge.^[16] Council runs an Anthropic model and an OpenAI model simultaneously, each producing a complete standalone report, and a judge model then summarizes where they agree, where they diverge, and what each contributes.^[16] Both features launched in the Frontier program.^[16]

Analyst agent

Analyst is the second first-party reasoning agent introduced alongside Researcher in March 2025 (generally available June 2, 2025).^[9][10] Where Researcher focuses on synthesizing information from disparate sources, Analyst focuses on turning raw data into insights.^[9]

Capabilities

Analyst is built on OpenAI's o3-mini reasoning model and uses chain-of-thought reasoning to progress through problems iteratively, "taking as many steps as necessary to refine its reasoning."^[9] It can run Python to handle complex data queries, and users can view the code it runs in real time to check its work.^[9] Microsoft's examples include turning raw data scattered across multiple spreadsheets into a demand forecast, a visualization of customer purchasing patterns, or a revenue projection.^[9] At general availability, Analyst was available in eight languages.^[10] After App Skills was retired in Excel in February 2026, Microsoft pointed users to Copilot Chat for agents such as Analyst.^[39]

Copilot Wave 2

Announced September 16, 2024, Copilot Wave 2 brought together "web + work + Pages as a new design system for knowledge work."^[6]

Key Wave 2 deliverables and their availability dates:

Copilot Wave 3

Announced March 9, 2026, Wave 3 was described by Microsoft as "a new version of Microsoft 365 Copilot, moving beyond assistance to embedded agentic capabilities."^[18] Jared Spataro, Microsoft's chief marketing officer for AI at Work, told Fortune: "We really believe right now is an inflection point. The inflection point for us is Copilot taking on these agentic capabilities and going from assistance to real doing."^[40]

Copilot Cowork

Users describe the outcome they want, and Cowork grounds the work in their emails, meetings, messages, files, and data through Work IQ, turns the request into a plan, and continues it in the background with checkpoints where they can confirm progress, make changes, or pause.^[19] Microsoft's examples include cleaning up a calendar, building a customer meeting packet, researching a company from earnings reports and SEC filings, and creating a product launch plan.^[19] Cowork runs in a sandboxed cloud environment within Microsoft 365's security and governance boundaries.^[19]

Spataro told Fortune that Copilot Cowork uses Anthropic's Claude model and the same "agentic harness" as Anthropic's Claude Cowork, but runs in the cloud within the customer's Microsoft 365 tenant rather than locally on a user's device.^[40] Cowork was tested as a research preview, became available in the Frontier program on March 30, 2026, and was made generally available worldwide on June 16, 2026.^[20][41] At general availability Microsoft said more than half of the Fortune 500 was using Cowork, that it ran on Anthropic models including Claude Opus 4.8 and Sonnet 4.6 (with GPT 5.5 available in Frontier), and that a fine-tuned model called Cowork 1 would follow.^[41] It also said that internal testing found Copilot Cowork on average 30-40% cheaper per prompt than Claude Cowork with its Microsoft 365 connector; this was Microsoft's own analysis of 125 test runs, both using Opus 4.8.^[41] Cowork is off by default, and administrators can set spending limits at the tenant, group, and user levels.^[41]

Adoption

Microsoft first disclosed a paid Microsoft 365 Copilot seat count on its January 2026 earnings call and has updated the figure each quarter since.^{[32][33][34][35]}

Seat and usage metrics

Other figures Microsoft has disclosed:

• On the January 2026 call, Microsoft said daily active users of Microsoft 365 Copilot increased "10X year-over-year," and that paid Microsoft 365 commercial seats had grown to over 450 million.^[33] The Office 365 for IT Pros blog calculated that 15 million seats represented about 3.33% of that installed base.^[32]
• In April 2026 Microsoft said weekly engagement with Copilot was "now at the same level as Outlook," and that Bayer, Johnson & Johnson, Mercedes, and Roche had each committed to 90,000 or more seats.^[34]
• In July 2026 Microsoft said the number of customers with more than 50,000 seats had increased more than 7x year-over-year, that KPMG was expanding its deployment across more than 276,000 professionals, that HSBC had committed to 200,000 seats, and that EY had deployed E7 to 400,000 employees.^[35] It also said it had added usage-based billing to Cowork, "with thousands of customers already paying for and actively using it."^[35]
• In a July 30, 2026 blog post, Spataro wrote that the number of enterprise customers deploying Copilot to the majority of their information workers grew nearly 75% quarter over quarter.^[43]

Independent estimates have been lower on active use. Stackmatix, citing a Recon Analytics survey of more than 150,000 US respondents, reported a Copilot "workplace conversion rate" (the share of employees with access who actively use it) of 35.8%, compared with 83.1% for ChatGPT.^[27]

Notable enterprise customers

Enterprise customers that Microsoft has named in connection with Microsoft 365 Copilot include Goodyear, General Motors, The Walsh Group, and Avanade (early testing), Visa, KPMG, and Lumen Technologies (Early Access Program),^[2][3] Vodafone (68,000 employees, September 2024),^[6] BlackRock (24,000 seats, November 2024),^[31] and Accenture, Bayer, Johnson & Johnson, Mercedes, Roche, KPMG, HSBC, and EY in 2026.^[34][35]

Deployment challenges

Early deployments were slower than the initial interest suggested. Computerworld reported in September 2024 that a Gartner survey of 132 IT leaders conducted in June 2024 found that 60% had started Microsoft 365 Copilot pilot projects, but only 6% had finished their pilots and were planning large-scale deployments, and only 1% had deployed Copilot to all eligible office workers.^[26] In the same survey, 64% said information governance and security risks required significant time and resources, and concerns about data "oversharing" caused 40% to delay rollouts by three months or more.^[26] Gartner analyst Max Goss told Computerworld: "What we are not seeing, though, is that those pilots translate into broader deployments."^[26]

Competition

Microsoft 365 Copilot competes with AI assistants from other productivity-suite vendors and with standalone enterprise AI products, including ChatGPT Enterprise from OpenAI, Google's Gemini in Workspace and Gemini Enterprise, and Glean (company).

Comparison table

Google Workspace Gemini

In January 2025 Google announced that "the best of Google AI" would be included in Workspace Business and Enterprise plans without the need to purchase add-ons, covering Gemini in Gmail, Docs, Sheets, Meet, Chat, Vids, and other apps.^[53] Google gave the example that a Business Standard customer who previously paid $32 per user per month with the Gemini Business add-on would now pay $14.^[53] By contrast, Microsoft's full Copilot experience requires a separate add-on license on top of a Microsoft 365 plan.^[24]

On October 9, 2025, Google introduced Gemini Enterprise, which it called "the new front door for Google AI in your workplace."^[54] Microsoft maintains a comparison page arguing that Copilot works natively in Word and Excel while, in its tests, Gemini created new files instead of editing existing ones, and that Gemini Enterprise relies on connectors that mirror Microsoft 365 data outside the tenant; these are Microsoft's own claims.^[25]

ChatGPT Enterprise

ChatGPT Enterprise is OpenAI's business offering. OpenAI says business data, "including conversations, files, and outputs from ChatGPT," is not used to train its models by default, and that ChatGPT Enterprise supports encryption, retention, compliance controls, and admin control over agents and connected tools.^[55] As of September 2026, OpenAI markets ChatGPT Enterprise with ChatGPT Work, which "can plan, take action across your apps and files, and create finished materials like spreadsheets, slides, docs, and web apps," and with the Codex coding agent.^[55] Microsoft's September 2026 pricing post compared Copilot's costs against Claude and ChatGPT, including ChatGPT Work, using its own internal analysis.^[47] In consumer chatbot usage, IntuitionLabs cited StatCounter data from July 2024 to August 2025 showing ChatGPT with about 81% of global AI chatbot usage and Microsoft Copilot with about 5%.^[30]

Glean

Glean (company) approaches enterprise AI from the perspective of workplace search rather than productivity suite integration. In September 2025 it introduced a third-generation Glean Assistant and an expanded Enterprise Graph that combines a company-wide knowledge graph with a personal graph for each employee reflecting their "projects, collaborators, and work style."^[29] The assistant draws on an employee's past work "across 100+ connected applications," and for complex problems it can orchestrate sub-agents that run simultaneously, using Glean's Agentic Engine 2.^[28][29]

Futurum Group reported that Glean's model hub supports more than 15 LLMs, that the company surpassed $100 million ARR in its fiscal year ending January 2025 and reached $200 million ARR about nine months later, and that a $150 million Series F in June 2025 valued it at $7.2 billion.^[28] Futurum wrote that Microsoft 365 Copilot "remains the most frequently cited competitive reference for Glean," and that Microsoft's knowledge grounding is "architecturally weighted toward its own ecosystem."^[28]

Criticism and concerns

ROI and business value

One of the most persistent criticisms of Microsoft 365 Copilot has been the difficulty of measuring return on investment. At $30 per user per month on top of existing Microsoft 365 subscription costs, the total per-seat expense for enterprise customers is significant.^[26] In the June 2024 Gartner survey reported by Computerworld, only 3% of respondents said Microsoft 365 Copilot provided "significant" value at that stage, while the majority called it "somewhat valuable."^[26] Computerworld, citing IDC research vice president Dave Schubmehl, reported that while value is clear in some cases, ROI is often more elusive for businesses.^[26]

Data security and oversharing

A significant concern for enterprise security teams is the risk of Copilot surfacing sensitive information that was never properly restricted. Because Copilot surfaces data based on existing access permissions, documents that are not labeled or permissioned correctly can appear in Copilot responses.^[26] Gartner's Max Goss told Computerworld: "The better the information retrieval tool, the better your information governance has to be. And Copilot is, among many things, a very good information retrieval tool."^[26] In the Gartner survey, 57% of respondents limited their rollout to "low-risk or trusted" users to manage risk.^[26]

Change management

Some organizations report that integrating Copilot into existing workflows requires more change management effort than anticipated. In the Gartner survey, 73% of respondents said deployments required higher change management efforts than expected, and 87% said end users require frequent engagement and education.^[26]

Cost structure

By contrast, Google includes Gemini features in Workspace Business and Enterprise plan prices rather than selling them as an add-on.^[53] For a Microsoft 365 E5 customer, adding Copilot brings the list price to $90 per user per month after the July 2026 price increase ($60 for E5 plus $30 for Copilot).^[14][51] Since June 2026, Cowork and other agentic capabilities are also billed by usage on top of the per-user license, and Charles Lamanna, Microsoft's executive vice president for Copilot, agents, and platform, wrote that how to budget for Cowork's variable pricing was the most frequent question he heard from customers.^[41]

Responsible AI development

Microsoft states that Microsoft 365 Copilot is developed in accordance with its AI principles and Responsible AI Standard. A multidisciplinary team of researchers, engineers, and policy experts reviews AI systems for potential harms and mitigations, and Microsoft prompts users to review, fact-check, and adjust content based on their own subject-matter expertise.^[1]

Work IQ for custom agents, introduced at Ignite 2025, respects existing permissions, sensitivity labels, compliance controls, audit, logging, monitoring, and policy enforcement, and is available in Copilot Studio or via API.^[13]

The Agent Builder approval workflow, rolling out in May 2026, lets administrators review and approve agents before they are published to the organization's Agent Store.^[21] Microsoft Scout (now Autopilot) runs under its own governed Entra identity, and sensitive actions can require a human to sign off before they proceed.^[42]

Reception

Initial enterprise reception was mixed. Gartner told Computerworld in 2024 that most organizations it spoke to were trying Copilot "in some form or another," but that pilots were not yet translating into broader deployments, with data governance and ROI tracking cited as the main barriers.^[26]

Microsoft's reported seat counts later grew quickly, from 15 million paid seats in January 2026 to more than 30 million in July 2026.^[33][35] GeekWire noted in August 2026 that 30 million seats still amounted to about 7% of the more than 450 million commercial Microsoft 365 paid seats Microsoft reported in January.^[45]

The comparison with Glean (company), ChatGPT Enterprise, and Google's Gemini products remains an active evaluation point for enterprise buyers. Copilot's advantage, as Microsoft presents it, is its native depth within Microsoft 365 apps and its governance integration with Microsoft Purview, Entra, and Agent 365.^[18][25]

See also

• GPT-4
• GPT-4o
• GPT-5
• OpenAI
• Anthropic
• Microsoft
• Microsoft Copilot
• Large Language Models
• Gemini
• GitHub Copilot
• Claude Cowork
• Glean (company)
• ChatGPT
• Natural Language Processing
• Prompt Engineering

References

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