M365 Copilot Guide

Microsoft 365 Copilot is Microsoft's AI layer on top of the M365 stack. Inline in Word, Excel, PowerPoint, Outlook, OneNote, and Teams, plus a dedicated web chat ("Copilot Chat"), plus Copilot Studio for building agents. The connection to the Microsoft Graph lets Copilot use emails, calendars, files, and SharePoint content as context. As of August 2026: Anthropic has been approved as a Microsoft subprocessor since January 7, 2026. Claude models can be used in Researcher, Excel Agent Mode, Copilot Studio, and in the Word, Excel, and PowerPoint agents; with Claude Sonnet 5 and Claude Opus 5 they have additionally been available in the model selector of Copilot Chat, Copilot Cowork, and Copilot in the Office apps since July 2026. Name change since August 2026: In its documentation, Microsoft is renaming the product from "Microsoft 365 Copilot" to "Microsoft Copilot", and "Microsoft 365 Copilot Chat" accordingly becomes "Microsoft Copilot Chat". Nothing changes for security, compliance, or data protection, and the license names on the invoice stay as they are for now. This guide continues to use "M365 Copilot" wherever it helps to distinguish it from the consumer version.

1.1 The Seven Building Blocks

Model mix: M365 Copilot uses a model router ("Auto") that, since early 2026, decides between "Quick response" (GPT-5.5 Instant) and "Think deeper" (GPT-5.5 Thinking). Manual override is possible. Since July 9, 2026, GPT-5.6 has been the preferred model in Word, Excel, PowerPoint, Copilot Chat, and Cowork; the rollout depends on region and tenant configuration. Since January 7, 2026, Anthropic has been approved as a Microsoft subprocessor, and Claude models run in Researcher, Excel Agent Mode, Copilot Studio, as well as the Word, Excel, and PowerPoint agents. In commercial tenants outside the EU/EFTA/UK, Anthropic is enabled by default; in the EU/EFTA/UK an AI Administrator or Global Admin has to opt in explicitly. OpenAI is a different story: the OpenAI subprocessor has been on by default for all users of eligible commercial customers since July 24, 2026, and Microsoft does not mention an EU exception for this default (see Chapter 21.1). Since July 22, 2026, non-federal GCC customers can likewise enable Anthropic models via a dedicated Microsoft 365 Admin Center setting (off by default). Federal GCC customers as well as GCC High and DoD remain excluded.

1.2 Security, Data Protection, EU Hosting

• Training opt-out: Contractually excluded in M365 Copilot. Inputs and answers are not used for training. This applies contractually to Anthropic outputs as well (Microsoft DPA + Enterprise Data Protection apply).
• EU Data Boundary: EU workspace data is processed and stored in EU data centers. Important exceptions: Bing web queries (Microsoft as data controller, not EUDB) and Anthropic models (outside the EUDB, which is why they are OFF by default in the EU/EFTA/UK).
• Compliance: SOC 1, SOC 2 Type II, ISO 27001, ISO 27017, ISO 27018, ISO 42001 (AI Management Systems, new), FedRAMP High, HIPAA, GDPR-compliant data processing addendum.
• Microsoft Purview: Sensitivity labels (including EXTRACT and VIEW usage rights), DLP rules (prompt-based with SITs too), and audit logs from Purview apply to Copilot as well. If you have classified a file in Purview, that protection shows up in Copilot answers as well.
• Protection layers: Prompt injection blocking (jailbreak + XPIA), protected material detection (copyright + code licenses), content harm filters, workplace harms filter (no AI assessment of employee performance, attitude, or emotion).
• Customer Copyright Commitment (CCC): Microsoft indemnifies Copilot outputs (including Anthropic outputs) against copyright claims.
• EU AI Act: Microsoft commits to complying with the EU AI Act. The AI literacy obligation under Art. 4, however, lies with the deploying organization (see Chapter 21.2). As a working aid, Microsoft provides the "Microsoft Copilot & Copilot Chat Risk Assessment Quickstart" in the Service Trust Portal.

1.3 Licenses at a Glance

Details follow in Chapter 3. Quick mapping:

• Microsoft Copilot (consumer): Free, web chat without Graph access. Included in M365 Personal and M365 Family since January 16, 2025.
• M365 Copilot Chat (Business): 0 euros for every eligible M365 subscription (Business Basic/Standard/Premium, Apps for Business, E1/E3/E5, A1/A3/A5, F1/F3). Web-grounded chat, Copilot Pages, file upload, image generation, Enterprise Data Protection, Pay-as-you-go agents.
• M365 Copilot (add-on): Paid, full Microsoft Graph access (Work IQ), inline in Word/Excel/PPT/Outlook/Teams/OneNote, Pages, Notebooks, building custom agents, Copilot Search, Copilot Analytics. SharePoint Advanced Management (SAM) is included (since early 2025).
• Copilot Studio: Separate license for more complex agent development, tenant pack model or Pay-as-you-go.
• Pay-as-you-go: For M365 Copilot Chat, SharePoint Agents, and the Microsoft Copilot Retrieval API (preview). Billed via Azure, AI Administrator role recommended.

1.4 Who Uses M365 Copilot

As of Q1 2026: 70 percent of the Fortune 500 have at least one M365 Copilot pilot. 15 million paid seats globally. In the DACH mid-market, M365 Copilot is the most widespread AI tool at 28 percent according to Bitkom 2025, driven by the high Microsoft penetration.

Typical use cases:

• Outlook: Drafting emails, summarizing emails, suggested replies.
• Teams: Meeting recap, extracting action items, "What did I miss" feature.
• Word: First drafts, rephrasing, style checking.
• Excel: Data analysis, pivot recommendations, formula explanations.
• SharePoint: Knowledge search across all connected sites, answers with citations.

Productive in ten minutes. Which license you have determines where you find Copilot and which features are active. Here is the quick start.

2.1 Where You Can Reach Copilot

2.2 Sign-In

• Personal: Microsoft account. Free or Copilot Pro.
• Business: Microsoft Entra account (formerly Azure AD). M365 Copilot or Copilot Chat (Business) is detected automatically.
• Multiple accounts: Account switcher in the top right. If you use Copilot both personally and for work, keep the two accounts separate.

2.3 What You Should Do in the First Ten Minutes

1. Check your license: Click the Copilot button in Outlook or Word. If it is missing, your account has no M365 Copilot license. For diagnostics, there is the "Copilot License Details" tool (aka.ms/CopilotLicenseDetails). After a new assignment, it can take up to 24 hours for Copilot to appear.
2. Set custom instructions: In Copilot Chat under Settings, Personalization. An entry like "Always answer in English" is often enough (see Chapter 11).
3. First inline task: Select an email in Outlook and click "Summarize". This is the lowest-threshold entry action.
4. Browse the Prompt Gallery: For inspiration. More in Chapter 10.
5. Try Pages: From a Copilot answer, click "Edit in Pages", then share it with colleagues.

Microsoft's Copilot licensing landscape got simpler in 2026: Microsoft Copilot Consumer has been included in M365 Personal/Family since January 2025. For business there are two clear tracks: M365 Copilot Chat (free in every M365 subscription) and M365 Copilot (paid add-on with Microsoft Graph grounding). Plus Copilot Studio and Pay-as-you-go for specialized scenarios.

3.1 License comparison

Important note: M365 Copilot is an add-on to an existing M365 license (E3, E5, Business Basic, Standard, and Premium, Apps for Business and for Enterprise, F1/F3 in Frontline). Pure Office 365, Teams, Exchange, SharePoint, OneDrive, Planner, Project, Visio, and Clipchamp plans now qualify as a base too. No base license, no Copilot license. Exception E7: Microsoft 365 E7 (GA since May 1, 2026, E5 plus Microsoft Copilot plus Entra Suite plus Agent 365) already includes Copilot, so no add-on is needed. Education note: M365 A5, A3, A2, and A1 as well as Office 365 A5, A3, and A1 qualify as a base, for faculty, staff, and students aged 13 and up, purchased via EES or CSP. The add-on SKU is called "M365 A3/A5 Extra Features for faculty".

In-app labels (since the rename without "M365"):

• "Copilot (Premium)" (previously "M365 Copilot (Premium)"): Users with the add-on license, Priority Access, full Graph access.
• "Copilot (Basic)" (previously "M365 Copilot (Basic)"): Users with an M365 subscription without the Copilot add-on, Standard Access. According to Microsoft's overview (as of October 14, 2026), this also includes Standard Access to Copilot in Word, Excel, PowerPoint, and OneNote, and Teams summaries go back 30 days.
• "Copilot Chat (Basic)": No in-app Copilot in Word/Excel/PPT/OneNote.
• Usage-based services: Microsoft's comparison table now lists Cowork and Microsoft Copilot Code (Frontier) in a separate fourth column, "Usage-based billing capabilities", usable only with a Premium license.

3.2 Which models Copilot uses

Microsoft does not publicly communicate the exact models, they change in the background. Model router since early 2026: Auto mode decides between "Quick response" and "Think deeper". Manual override is optional.

• GPT-5.6 (since July 9, 2026): New preferred model in Word, Excel, PowerPoint, Copilot Chat, and Cowork. Copilot picks it automatically when it fits the task; where a model selector is available, you can select it directly too. According to Microsoft, fewer prompt rounds when writing in Word and more token-efficient analyses in Excel. GPT-5.6 is a model family made up of Sol, Terra, and Luna. Availability varies by region and tenant configuration, so your tenant may still be running GPT-5.5.
• Quick response: GPT-5.5 Instant (in Copilot Chat since May 2026). Fast, compact, good for standard requests with image analysis and STEM.
• Think deeper: GPT-5.5 Thinking. Deep multi-step reasoning, structured analysis, complex problem solving.
• Reasoning agents (Researcher, Analyst): o-series models plus Anthropic Claude (since the subprocessor approval).
• Image generation: DALL-E family. Video generation via admin toggle (since April 2026).
• Voice: Whisper family for speech recognition. Real-time voice only for licensed M365 Copilot users.
• Anthropic Claude (since January 7, 2026): In Researcher, Excel Agent Mode, Copilot Studio, Word, Excel, and PowerPoint agents, and selectable in Copilot Chat (web/desktop/mobile). Default OFF in EU/EFTA/UK (opt-in by an AI Administrator or Global Admin required), default ON elsewhere. Can be assigned granularly per user or Entra security group.
• Claude Sonnet 5 (since July 2, 2026) and Claude Opus 5 (since July 24, 2026): The current Anthropic models are available in the Copilot model selector in Word, Excel, and PowerPoint, in Copilot Chat, in Copilot Cowork, and in Copilot Studio. Opus 5 is designed for complex, multi-step work (reasoning across long documents, spreadsheets, decks, and longer-running tasks) and costs no extra compared to GPT-5.6, the standard Copilot license is enough. The prerequisite remains that Anthropic is enabled in the tenant, which in EU/EFTA/UK means the admin opt-in. Since August 11, 2026, the Anthropic models can additionally be selected directly in the model menu while editing Word documents (see Chapter 5.1).
• Claude Fable 5.1 (since September 1, 2026): Anthropic's current flagship model is available in Copilot Cowork and Copilot Studio. Microsoft positions it for long-running work, financial analysis, and visual frontend coding, and describes it as more concise in upfront planning and in the final summaries. Work IQ grounds the model in files, meetings, chats, and business data within existing permissions. Decisive for how to classify it: for eligible organizations, Fable 5.1 runs under Anthropic as a Microsoft subprocessor, so Microsoft Product Terms and the DPA apply, there are no additional terms and no data retention. No separate opt-in is needed as long as Anthropic is generally enabled in the tenant. You clarify eligibility with your Microsoft account team, availability varies by region and organization.
• GPT-6 Astra (since September 4, 2026): OpenAI's new frontier model, likewise in Copilot Cowork and Copilot Studio, to be enabled via the Microsoft 365 Admin Center. Microsoft's framing here is telling: Astra is meant for delegating larger tasks in one go, instead of breaking them into small steps yourself and guiding Copilot step by step. Here too, Work IQ grounds the model in files, meetings, chats, and business data. Availability likewise depends on region and organization.
• "Anthropic models with Data Retention" (since June 2026): Claude Fable 5.0 and Claude Mythos 5 are available under this label. Not to be confused with the separate admin switch "Allow the use of Preview models", which Microsoft explicitly does not recommend for production use. Here Anthropic acts as an independent data processor, NOT as a Microsoft subprocessor, and separate Anthropic contract terms apply. These models are default OFF tenant-wide and need their own admin opt-in, even if Anthropic is otherwise active. Do not confuse them with Fable 5.1, which is classified exactly the other way around (see above and Chapter 21.1).
• Claude Opus 5.5 and GPT-6 Sol (since September 22, 2026): According to Microsoft's announcement "More Models, One Copilot", the next model generation arrived in one go across Word, Excel, PowerPoint, Copilot Chat, Copilot Cowork, and Copilot Studio. Availability varies by license and region. Like all Anthropic models, Opus 5.5 is tied to the subprocessor switch and is therefore off by default in the EU, EFTA, and UK. Reports that GPT-5.6 and Opus 5 will gradually disappear from the model picker have not yet been confirmed by Microsoft with a date.
• GPT-6.1 Sol and Claude Sonnet 5.5 (since September 30, 2026): According to the Message Center (MC1483844), they arrive first in Copilot Cowork and Copilot Studio, billed there through usage-based Copilot Credits. In Word, Excel, PowerPoint, and Copilot Chat, a staged rollout follows from the first week of October, covered there by the Copilot license. Prerequisites: Sonnet 5.5 requires the Anthropic subprocessor to be enabled, and on some surfaces GPT-6.1 Sol requires the OpenAI subprocessor. What is new is that usage limits apply to these models: anyone approaching the limit gets a notice and can switch to Auto or another model. Microsoft had not provided a fixed date for Word, Excel, PowerPoint, and Chat as of October 15. No new models have been added since September 30.
• xAI (since May 2026): Currently US only, opt-in via the Microsoft 365 Admin Center (same subprocessor panel as Anthropic). Since September 2026, Grok models have also been available as a Frontier preview in Word, Excel, and PowerPoint, off by default via an admin setting. They are explicitly not available in the EU, EFTA, UK, or in government and sovereign clouds.

Users can choose between Auto, Quick, and Think deeper in the model router. In licensed tenants, Anthropic models are shown via in-app indicators in M365 Copilot (web/desktop/mobile).

3.3 Limits

• Microsoft Copilot (Consumer): Limited prompts per day, no specific official figure.
• M365 Copilot Chat (Business): Standard Access, shares capacity with other users. When capacity is tight, you get a notice instead of a hard stop.
• M365 Copilot (Add-on): Priority Access, effectively unlimited for normal use cases. Soft limits on bulk operations.
• Copilot Studio: Tenant pack with a defined number of messages, additional packs can be purchased.
• PAYG: Billed via Azure, optional budget limits + notifications at thresholds.
• Copilot Cowork (documented limits): Prompts up to 250,000 characters, file attachments up to 200 MB, a maximum of 50 custom skills (as SKILL.md under /Documents/Cowork/skills/ in OneDrive). Hard limits: no access to local files, no encrypted files, and Cowork cannot delete anything in OneDrive and SharePoint.

3.4 Copilot Cowork and Copilot Credits (GA since June 16, 2026)

Copilot Cowork is Microsoft's agentic layer for complex, long-running multi-tool tasks. Instead of a single prompt, you describe a goal, Cowork plans the steps, reasons across emails, meetings, files, and chats via Work IQ, and executes the task end to end. The result is a finished deliverable (document, dashboard, board, sent communication), not a draft. Customer examples from the GA announcement: automated editing of spreadsheets including dependency charts, comparing thousands of files in minutes instead of weeks, a pipeline review that shrinks from a week to a morning.

• Billing models: Pay-as-you-go at 0.01 US dollars per Copilot Credit, or P3 (prepaid commitment with a discount).
• Rough task costs: light task about 1 to 3 US dollars, medium about 4 to 7 US dollars, heavy multi-output task 7 US dollars and up.
• Cost controls: Admins set spending limits at the tenant, group, and user level, configure usage alerts, allow user-initiated credit requests, and pull usage reporting by user, group, and feature.
• Cost management dashboard in the Microsoft 365 Admin Center (Consumption tab since August 11, 2026): Copilot Credits are managed centrally in the Microsoft 365 Admin Center. The Overview tab shows total consumption, remaining capacity, and emerging trends in real time. The Consumption tab goes into detail and breaks consumption down by user, group, service, and agent, makes heavy users and cost drivers visible, and shows consumption trends over time. In the configuration you choose the billing model (prepaid P3, Pay-as-you-go, or existing capacity), attach an Azure subscription, define spending policies, and set hard caps.
• Consumption Dashboard in Viva Insights (since August 11, 2026): Alongside the admin view in the Microsoft 365 Admin Center, consumption is now available as its own dashboard in Microsoft Viva Insights, intended for leaders and analysts rather than IT. It shows active users, Copilot Credits consumed, and session count, plus consumption trends, the breakdown by service, organization, and job function, and an intensity view (top 1 percent, top 5 percent, and so on) that makes visible whether a few heavy users drive the bulk of the costs. A dedicated view lists the spending policies whose limit is about to be reached. Access: Insights Analysts with a global partition and Global Admins see the whole organization, leaders only their own group. Active by default. Prerequisite: Usage-based billing must be set up via Cost Management in the Microsoft 365 Admin Center. The data currently covers only Copilot Cowork and the Work IQ API, GitHub AI Credits sit on their own tab in public preview. The numbers are reference values, the billing in the Microsoft 365 Admin Center remains authoritative.
• Generating and editing images in Cowork (since August 25, 2026): Cowork can create and modify images directly within the workflow, according to Microsoft based on OpenAI's ChatGPT Images 2.0 model. Available on Windows, macOS, web, Android, and iOS. Watch the cost calculation: image generation is part of Cowork execution and therefore consumes credits, which adds up faster than expected on deck-heavy tasks.
• Effort Level (since August 2026): Cowork tasks can be run at five levels, Light, Medium (default), High, Extra High, and Max. The level governs the balance of output quality, processing time, and credit consumption. Model selection and Effort Level sit together right in the input field. For enablement this is the most important new dial: most everyday tasks need Medium, and anyone who sets everything to Max out of habit pays for it immediately in credits.
• The /cost skill now shows your balance: Besides the estimate for the current session, it reports the remaining share of the monthly limit, consumption so far in the current month, and the date the limit resets. This lets users gauge their own consumption without IT having to pull a report.
• "Scheduled" becomes "Automations": The tab is now called Automations and bundles scheduled and event-triggered tasks in one place instead of separating the two.
• What runs on Copilot Credits: currently Copilot Cowork, Apps built with Copilot Cowork, and the Work IQ API. Copilot Chat, SharePoint Agents, and the Retrieval API continue to run on classic Pay-as-you-go with a billing policy and Azure meter, Copilot Studio on its own Pay-as-you-go model. Microsoft has announced that further services will gradually move to the credit model.
• Event-triggered tasks (since August 2026): Cowork tasks can now be triggered by events as well as scheduled, specifically an incoming email, a Teams message, or a mention. With this, Cowork finally leaves the "I start something and wait" mode behind.
• Local browser use is GA (since August 2026): What was previously reserved for the Frontier program is now available to all tenants with a Microsoft Copilot license. Microsoft Edge is required.
• Brand templates for decks: Cowork pulls a .potx from the SharePoint Organization Assets Library or from the OneDrive root folder and takes over its color palette, brand fonts, logos, all named layouts including slide masters, and the slide geometry. If you do not want that in a particular case, say so in the prompt.
• App skill (September 2026, Frontier): Build, publish, and share applications from a description. Keep an eye on billing here, because "Apps built with Copilot Cowork" are a separate credit-consuming service.
• Model selection (as of September 2026): Auto as the default, plus GPT 5.5 Frontier, GPT 5.6 Sol, GPT 5.6 Terra, GPT 6 Astra, Opus 5, Claude Sonnet 5, and Claude Fable 5.1, which has replaced Fable 5 in Cowork. Claude Opus 5.5 and GPT-6 Sol were added on September 22, and GPT-6.1 Sol and Claude Sonnet 5.5 on September 30 (see Chapter 3.2). A small but important clarification: in Cowork, Sonnet 5 is described as the model for everyday tasks and quick answers, not as the reasoning default. The statement "Sonnet 5 is the default for demanding tasks" applies exclusively to Copilot in Word on the web (see Chapter 5.1).
• Editing existing Office files (September 2026): Cowork can edit existing Word, Excel, and PowerPoint files in OneDrive and SharePoint directly instead of only creating new ones. Version history is preserved, so every Cowork change can be rolled back. In the mobile app, plugins are reachable via Plus, Skills.
• Credit requests and read-only roles (since September 2026): Users can request access or a higher limit directly, and admins configure who these requests go to. In addition, read-only roles can now view the consumption dashboards, intended for finance, controlling, and license management, who need the numbers but should not get write access in the Microsoft 365 Admin Center.

3.5 The new Copilot: Home, Code, Autopilot, and a two-tier pricing model (since September 25, 2026)

On September 25, 2026, Microsoft restructured the Copilot app and overhauled the pricing model at the same time. Going forward, the app is organized into three areas:

• Home: Chat for quick questions and Cowork for delegated tasks in one place, plus "Office in Copilot", meaning you create and edit Word, Excel, and PowerPoint files directly in Copilot. A personal "Today" dashboard enters private preview in October. Rollout initially via the Frontier program.
• Code: Build widgets, dashboards, and small apps from a description, executed in a sandbox based on GitHub Copilot technology. The apps run on the Copilot Managed Runtime (preview) and are billed in Copilot Credits. Frontier from the end of September.
• Autopilot (formerly "Scout"): an always-on agent with its own identity that independently pursues assigned goals in Teams and Outlook. Private preview since the end of September.

What the September 28 pricing announcement clarifies (MC1479276): The license also covers model choice in everyday use; GPT-5.6 and Sonnet 5 are included, Opus 5 "with limits". Anyone who hits a limit first gets a warning and then chooses between Auto at no extra cost and credits. According to the Message Center, usage-based billing in Copilot starts in the fourth quarter of 2026.

• Credit models in the chat selector (GA October 2026, RM571400): Models that require credits appear in the Copilot Chat model menu. Admins allocate credits, and users can request additional credits.
• FinOps tools (preview since September 2026): Model families and effort levels can be assigned per group, starting with Cowork, and "Auto" respects these assignments. Spending Policies can be managed via the Graph API, the billing method of existing policies can be changed afterwards, and users see their own consumption directly in Copilot (GA since September).
• New entry points (MC1479277, as of October 12): Researcher and Analyst are no longer pinned by default, and admins can pre-pin them. The "Agents" entry point in Chat and "Customize" in Cowork are being replaced by "Plugins", and Automations move to Home.
• Chat handles long tasks (Frontier): Copilot Chat works through multi-step assignments across emails, meetings, Teams, and files and produces Word, PowerPoint, Excel, PDF, and HTML files, trackable in a new Tasks view. Copilot license only. From October, Chat shows worldwide which skills it used.
• Setting up Code: For Microsoft Copilot Code, admins need to deploy the Unified App and set the update channel to Beta.
• Office in the new Copilot app (Frontier since October 9, 2026): Word, Excel, and PowerPoint with full editing, comments, and co-authoring right next to Chat or Cowork. A Library shows recently used Office files, Pages, and AI images; everything lives in OneDrive, and labels and versions are preserved. Via Chat this is included in the license; via Cowork it runs on credits.

Copilot Chat is the central web interface. You reach it via copilot.microsoft.com or in the Edge browser sidebar. With an M365 Copilot license, Microsoft Graph grounding ("Work IQ") switches on; without a license you only get web grounding. A green shield in the UI signals that Enterprise Data Protection is active.

4.1 One Chat, One Work IQ Switch (since August 25, 2026)

The separate Work and Web tabs are gone. Microsoft has merged both chats into a single interface, controlled by a Work IQ button at the top left. Instead of choosing a mode up front, you now only decide whether Copilot is allowed to access work data at all:

• Work IQ on: Copilot draws on your work data, meaning emails, files, chats, meetings, people, and projects across Microsoft 365, in addition to the web and to anything you attach. Copilot decides the mix of work and web sources itself based on the prompt.
• Work IQ off: Copilot answers without touching work data and uses only publicly available web information plus the content you attach to the prompt.
• Default: With a Microsoft Copilot add-on license, Work IQ is on by default. The switch can be flipped at any time.
• Page mode: Remains Edge-specific. Copilot knows the content of the current browser page and answers questions about it ("Summarize this", "Compare with ...").

4.2 Model Router ("Auto")

Since early 2026, Copilot Chat defaults to "Auto" and routes between these modes:

• Quick response: GPT-5.5 Instant. Fast, compact, good image analysis and STEM performance.
• Think deeper: GPT-5.5 Thinking. Deep multi-step reasoning for complex problems.
• GPT-5.6 (since July 9, 2026): Preferred model that the router pulls in automatically when it fits the task. Can be selected directly in the model selector as well, provided it has been rolled out in the tenant.
• Override: Selectable manually in the model selector.
• Anthropic toggle: Can be enabled per user or Entra group in licensed tenants outside GCC/DoD. In EU/EFTA/UK it defaults to OFF, an AI Administrator or Global Admin has to opt in explicitly.

4.3 Anatomy of the Chat

• Work IQ button at the top left (since August 25, 2026): A single on/off switch for access to work data; it has replaced the old Work and Web tabs (see Chapter 4.1). With a Copilot license it is on by default. The model selector (Auto, Quick, Think deeper) still sits at the top right.
• Green EDP shield: Visual signal that Enterprise Data Protection is active.
• Input field at the bottom: Plus button for file upload (drag-and-drop since May 2026, including PDFs directly in the chat pane), tool buttons for web search and image generation.
• Sidebar on the left: Chat history grouped by date. Pinning for favorites. Infinite scroll in the history (since June 16, 2026): older chat sessions load automatically as you scroll, the "Load more" click is gone. Note: since January 28, 2026, Copilot Chat can no longer be unpinned in the M365 Copilot app, the setting no longer takes effect there.
• Plugins panel: Connector selection when Work IQ is active (which data sources Copilot may use).
• Response actions: Copy, Regenerate (since October 6, 2026 on the web with the options "Try Again" and "Switch Model"), Insert (into Word/Outlook), share link.
• OneDrive action suggestions (since May 19, 2026): The OneDrive file preview shows Copilot actions you can run right away ("Summarize", "Generate FAQ"), one click opens the result in the chat.
• Code Interpreter on chat search files (since April 2026): Copilot can analyze files it finds via enterprise search with Python, without a manual upload.
• Edit scheduled prompts (since April 2026): Scheduled prompts can be adjusted after the fact.
• Open cited Office files in the chat (since July 1, 2026): Cited Word, Excel, PowerPoint, and PDF content opens directly in the Copilot chat instead of a separate tab, keeping the context in one place.
• Brand Kit and style for visuals (since July 1, 2026): For generated visuals you can choose style and format and apply your organization's Brand Kit directly.
• Generate a Brand Kit from your own brand guidelines (since July 15, 2026): Instead of maintaining the Brand Kit manually, you can upload your brand guidelines document. Copilot extracts the brand elements from it and creates the Brand Kit automatically.
• Take a screenshot directly from Copilot (Windows, since July 29, 2026): A button in the chat starts the screen capture, and the snippet lands directly in the prompt. No more manual snipping tool plus upload, and visual questions ("Why does this layout break?") get answered much faster.
• Images inline in the response (since July 29, 2026): Copilot shows matching images from files and meetings directly in the response instead of only linking to them. Clicking the image opens the source.
• Cited files in the previewer with a Copilot button (since July 29, 2026): In the file preview of OneDrive and SharePoint, a floating Copilot button sits at the bottom right (previously in the command bar) with prompt suggestions matched to the file type and a direct jump into the chat.
• Copilot Chat in the side pane of Copilot Search (since August 25, 2026): If you are working in Copilot Search, the chat appears on the right as a side pane, and you can keep asking directly from a search result without switching pages. Microsoft's logic behind this: search is the organizing layer, chat is the workspace. Available on Windows and on the web.
• Open Outlook emails directly in the chat (since August 25, 2026): Cited or found emails open inside the M365 Copilot app instead of a separate Outlook window. This complements the existing inline preview for Word, Excel, PowerPoint, and PDF content. Available on Windows, macOS, and on the web.
• Model choice for Researcher directly in the chat (since August 25, 2026): When you bring the Researcher agent into the chat, you now choose within the chat itself which supported model and which mode it uses for its research, instead of accepting the preset. Available on Windows and on the web.
• Simplified app design (since August 25, 2026): New chat start screen, tidier response layout, and a reworked navigation bar in the M365 Copilot app. For training materials this means: check the screenshots of the app interface once more. Available on Windows, macOS, and on the web.
• Follow up on a specific part of the response (September 2026): You select a sentence, a paragraph, or a table in the response and have Copilot work with just that, meaning explain it, shorten it, translate it, or derive the next steps. The selection appears as a preview in the prompt before sending and can still be edited there. Previously you had to copy the part you wanted and paste it back in, formatting damage included.
• "Try again" (since August 2026): Generate a new response to the same prompt, optionally with the same or a different model, without setting up the chat again. Handy when the first response misses the mark and the prompt itself was actually fine.
• Rich Answer Cards (since August 2026): For weather, sports, finance, images, video, places, and news, Copilot renders structured cards instead of running text.
• Code Blocks and Writing Blocks (September 2026): Code, charts, and diagrams can be previewed inline in the chat instead of only side by side on a separate code canvas. The counterpart for text is Writing Blocks: edit and iterate on drafts, memos, and emails directly in the chat without switching to another interface.
• Outlook draft from the chat, mobile (since August 2026): Describe the message, and Copilot creates an embedded Outlook draft directly in the chat that can be opened in Outlook Mobile.
• Agents with "/", skills with "@" (GA since September 2026): Both can now be invoked directly in the input field without first switching to a menu. In addition, there is a new chat design in the side pane and in the full view of Teams and Outlook. Also new is a Copilot Chat pane in Microsoft Forms that lets licensed users improve forms, draft invitations, and analyze responses.
• "Record" in the Copilot mobile app (September 2026): Record a conversation and have Copilot generate a transcript and summary from it. For in-person conversations, the same rule applies as for any recording: obtaining the consent of those present is your responsibility.
• Search for meetings, attachments, and emails (since September 2026): Copilot finds meetings by topic and keyword, searching the meeting invite text, the meeting chat, and the transcript, although the transcript only for the last two months. Email attachments show up in search results as clickable items and open without opening the email, and Outlook results can be sorted by date.
• Control Pages by voice command, mobile (since August 25, 2026): On Android and iOS, Pages can be revised via Copilot command ("Shorten this page"), and Copilot creates a Page on its own from within the chat ("Create a new page about XYZ"). Details on Pages in Chapter 12.
• Chat directly in the search results (since October 6, 2026, Windows and web): In Copilot Search, you can ask follow-up questions about the results in a conversation, and follow-ups build on the results (Roadmap ID 512429).
• Your own skills in Chat (GA rollout October to mid-November 2026, MC1493223): Users create, upload, edit, and share skills in Copilot Chat, and automatic invocation can be turned off. Admins distribute, install, or block skills and plugins under Agents, Tools, Upload. Skills created in Cowork only appear in Chat once they are shared. Tenants with Information Barriers follow in November, without sharing there.
• New Copilot in Edge (from mid-October 2026, MC1484007): New icon, simplified sidebar, voice and vision, no admin action needed. The dedicated Copilot tab in Edge has been postponed to GA from early November and requires a Copilot license plus admin activation (MC1440972). Copilot Chat in Edge for Business works across multiple tabs and YouTube, and from mid-October also across M365 documents, off by default and only with Entra sign-in (MC1187682).
• Opening web pages in the Copilot app (MC1474455): On Windows and macOS, links open next to the chat instead of in the browser. Admins enable this per device, and browser data stays local.
• Researcher is being rebuilt (October 21 to December 30, 2026): Researcher is switching to shared Copilot components, and its own tabs and the report length controls go away (MC1476269). The Sites control is also dropped; instead, you name websites in the prompt, and this is explicitly not an allow or block list (MC1478004).
• Profile cards for places (since September 23, 2026, Windows): Buildings, rooms, and workspaces from the Places directory can be called up as a profile card from Copilot Chat (Roadmap ID 553219).

4.4 Web Grounding

In web mode, Copilot searches Bing sources live. Responses contain citation links. Since early 2026, web search query citations show the exact search queries in the chat thread for 24 hours, so users can trace what was sent to Bing. Rich Bing Web Answer Cards (since April 2026) show weather, stocks, and similar interactive cards inline.

Data protection note: Bing web queries contain no user or tenant IDs, not the full prompt (unless it is very short), and no complete files. But: Bing queries run outside the EU Data Boundary and not under DPA/Enterprise Data Protection (Microsoft is the data controller here, not the processor).

4.5 Work Grounding (Microsoft Graph)

In work mode, Copilot searches your connected Microsoft 365 sources:

• Outlook emails from the last 12 months
• OneDrive and SharePoint files (as long as you have access)
• Teams chats and meetings (recap content, up to 30 days back)
• Calendar events
• Implicit grounding in Outlook (since May 19, 2026): Emails and email text snippets can be pulled directly into Copilot Chat prompts as context via drag&click, without you having to address sources manually.
• Loop pages and notebooks
• SharePoint lists via Context IQ (since July 29, 2026): In the Context IQ menu you can search for and select a specific SharePoint list to ground the prompt on. Answers on list data become noticeably more precise as a result, because Copilot no longer searches the entire tenant.
• List email attachments (since July 29, 2026): On request, Copilot lists the file attachments from sent and received emails, filtered by sender or time period, for example. Saves you from manually combing through the mailbox for a file.
• Hits from scanned PDFs and image text (GA since August 2026): Copilot Chat now finds text in scanned PDFs and in images embedded in Word, Excel, and PowerPoint files, too. Think scanned contracts, photographed tables, or whiteboard photos.
• Viva Engage, now including private content (since August 25, 2026): Until now, only public Engage communities, Answers, and Storylines were released as grounding sources. Content from private communities and events is new. The permission check applies unchanged, everyone only sees what they already have access to. A Viva Engage license is not required to get Engage-based answers, but the Copilot license is. In the free Copilot Chat, this source is not available.

The response contains a citation to the original source. The permission check is built in: Copilot only shows you sources you have access to yourself.

Power BI data in the chat (GA since August 2026): Copilot answers natural-language questions directly against Power BI reports and semantic models, not only in Excel (Chapter 6.4) but in the chat and in Copilot Cowork as well. "Where is the report?" turns into "How did revenue in the South region do?". The permissions and row-level security from the Power BI workspace remain the real boundary; Copilot does not bypass them. Available on Windows, macOS, web, Android, and iOS.

4.6 Sharing

• Share link: Shareable in the current chat state. The recipient sees the history but cannot continue chatting.
• Insert to Word/Outlook: Insert the response directly into a new or existing file.
• Save to Pages: Transfer the response to a Loop page and continue working on it collaboratively there.
• Session and response sharing (GA since August 2026): A dedicated link either for the whole session or for a single response, each as a read-only view from which recipients can continue working in their own chat. Rolled out for web, desktop, Mac, Android, and Teams.

4.7 Copilot Vision (Screen and Camera Sharing)

Since late July 2026, Copilot can "see" what you show it. You start a voice conversation with Copilot and then share your screen or your phone camera to ask questions about the visible content by voice (announced June 24, 2026, rollout completed by late July 2026). Handy for having an unfamiliar dialog explained, interpreting an error on the screen, or identifying a real-world object in front of the camera.

• On the desktop: Start screen sharing via the Copilot Chat input field or with the Win+C keyboard shortcut. You can share the whole screen or a single window.
• On the phone: Share the phone camera via the camera icon and ask Copilot live what it sees.
• License: On by default for licensed M365 Copilot users (Copilot Premium) as soon as the app has screen or camera permission.
• Admin control: Global Admins can manage Vision in the Microsoft 365 Admin Center and disable screen sharing, camera sharing, or both separately.

Copilot in Word is the inline editor assistant. First drafts, rephrasing, summarizing, style checks. Open it via the Copilot icon in the ribbon or with Cmd+I (macOS) or Ctrl+I (Windows).

5.1 The most important actions

• Draft with Copilot: Blank document plus a brief in the Copilot field. The first version is there in seconds.
• Rewrite: Select a paragraph, click "Rewrite". Adjust style, length, formality.
• Summarize: Turn even long documents into a bullet list or an executive summary.
• Visualize as Table: Convert a list into a table.
• Reference a File: Use the "/" command to reference other Word documents, PDFs, or OneNote notes; Copilot pulls in the content.
• Audio Overview with real-time voice (since July 1, 2026): The Audio Overview in Word now supports real-time voice interaction. You can ask follow-up questions by voice while listening and get an immediate answer.
• Model selection while editing (since August 11, 2026): The model menu in "Edit with Copilot" now offers the Anthropic models alongside the OpenAI models. So you decide per edit which model works on your document. This requires Anthropic to be enabled in the tenant, which in the EU/EFTA/UK means the admin opt-in (see Chapter 3.2 and 21.1).
• Claude Sonnet 5 as default for reasoning tasks (since August 25, 2026, web): Sonnet 5 is now available in the model menu of Copilot in Word and is set as the default there for more demanding tasks, meaning longer drafts and revisions where Copilot has to reason across the whole document. For quick rephrasing, the routing stays unchanged. Here too, the Anthropic opt-in in the tenant is a prerequisite.
• Voice questions during Read Aloud (since August 25, 2026, Windows): While having text read aloud, you can interject questions by voice ("What does that mean?", "Summarize this section") and get an immediate answer without stopping the read-aloud and losing context. Handy when working through long contracts or concept papers.
• Citations, images, and Android (September 2026): Copilot in Word places citations from the web and from work content directly in the response and can arrange and resize images and shapes in the document. Editing with Copilot is now also available on Android, in Word, Excel, and PowerPoint alike.
• Prompt box right at the Copilot button (rollout September to end of December 2026, MC1470885): Prompts can be typed or dictated without opening the Copilot pane, and M365 content can be referenced. If you select text in Word or PowerPoint, you get a contextual input box with suggestions such as Rewrite or Shorten. Keyboard shortcut Alt+C (Windows) and Cmd+Ctrl+I (Mac). Applies to Windows, Mac, and web, on by default, with no dedicated admin control.
• Summary at the top of the document goes away (since September 2026, MC1454113): The Copilot summary at the start of the document disappears and moves into the other Copilot surfaces. Training materials that show it are therefore out of date.

5.2 Context from the Microsoft Graph

With an M365 Copilot license, Copilot in Word can reference emails, other Word files, and SharePoint content. "Write a reply in the style of my last three memos to this recipient" works as long as the memos live in OneDrive or SharePoint.

5.3 Best practices

• Rough first, then refine: Have Copilot generate the outline first, then flesh it out paragraph by paragraph.
• Style pin: Store "Answer in the factual, clear DECAID style" in Custom Instructions so you don't have to repeat it in every prompt.
• Track Changes: For collaborative documents, turn on Track Changes before Copilot edits so it stays traceable what the AI changed.

Copilot in Excel turns formula-shy users into halfway decent data analysts. Spotting row patterns, pivot suggestions, charts, trends, conditional formatting on command. Excel data must be formatted as a table (Ctrl+T), otherwise Copilot won't see it.

6.1 The most important workflows

• Understand data: "What are the trends in this table?" Copilot describes anomalies, outliers, seasonality.
• Pivot suggestions: "Create a pivot table for quarterly revenue per region". Copilot builds the pivot table, you click "Insert".
• Formula explanation: Click a cell with a complex formula, then "Explain this formula".
• Conditional Formatting: "Highlight all cells where the margin is below 10 percent in red". Copilot configures the format.
• Chart from plain language: "Create a column chart of the top 5 sellers per quarter". The chart is inserted.
• Tracing what Copilot changed (since September 2026): Links in the chat response jump straight to the newly created or changed sheets, tables, ranges, and objects. Under Review > Show Changes, each card carries a note when the change came from Copilot. For workbooks maintained by several people, this is the basis for saying "Copilot set this number, not my colleague". Windows, macOS, and web.

6.2 Copilot in Excel with Python

Available since early 2026: the "Run Python" mode, which uses Pandas and Matplotlib in the Excel backend. For more complex statistics, forecasting, data cleansing. Powerful, but takes a short learning curve.

Python now available in "Edit with Copilot" too (since August 25, 2026, Windows, macOS, and web): The detour via a separate Python mode is gone. During normal editing with Copilot, Copilot runs Python code itself when needed and writes the result directly into the workbook. That puts statistics, simulations, heavier data transformations, and advanced visualizations within reach from the ordinary Copilot dialog instead of sitting next to it as a separate toolbox.

6.3 Copilot for finance workflows (since June 2026)

Microsoft has deliberately expanded Copilot in Excel for finance work (announced June 25, 2026), available to M365 Copilot users on Windows, Mac, and web:

• Skills: Prebuilt, repeatable workflows that Copilot runs on request (a kind of context-aware AI macro). First templates: Variance Analysis (actuals against budget/forecast), Financial Statement Generation (P&L, balance sheet, cash flow from raw data), and Forecasting.
• Financial Data Connectors: In addition to LSEG and Moody's (since May), connectors for trusted financial data are being added, including CB Insights, Daloopa, and PitchBook.
• Traceability: A "Plan with Copilot" mode shows in advance which cells, formulas, and assumptions Copilot intends to touch. Afterwards, the "Show Changes" view marks every Copilot change separately from human edits.

6.4 Power BI data as the foundation

Copilot can ground answers on Power BI reports and Semantic Models, both when you attach a specific report and when Copilot finds the right report on its own. In Excel, you attach a Power BI report via the work content picker and have Copilot analyze performance on it, name trends, or build summaries and side calculations directly in the sheet. Copilot works on the underlying report data and respects the existing row-level security. Exporting, copying, and manually reconciling between Power BI and Excel is no longer needed. The rollout covers Windows, Mac, and web.

Copilot in PowerPoint conjures a slide skeleton out of a briefing or a Word document. With a Designer theme, automatically matching the corporate template, provided one is stored in the tenant.

7.1 The most important workflows

• "Create presentation from this Word document": Select an existing Word document, Copilot generates a slide sequence with matching headers, bullets, images.
• "Create slide about ...": Create a single slide on instruction and insert it into the current deck.
• "Summarize this presentation": Boil an existing slide sequence down to two bullet points per slide.
• Speaker Notes: Derive speaker notes automatically from the slide content.
• Create a deck directly from the web app's start screen (since August 11, 2026): You no longer have to create an empty presentation first. On the PowerPoint for the web start page, you launch creation with Copilot directly. This requires Microsoft 365 Copilot Basic or Premium.
• Reference web sources while creating (since August 11, 2026): Copilot in PowerPoint can pull in specific information from the web while building a presentation and cite it as a source. Available on the web as well as on Windows and macOS. For confidential decks, the same consideration applies as for web grounding in chat: where web search is turned off by policy, this source is not available either.
• Reference an email as a source (since August 25, 2026, Windows): When creating a presentation, you can reference mail content, addressed by subject, sender, and time period or date. The typical case: build a deck straight from the approval thread with the customer, without first copying the content into a Word document.
• Have slide content explained during PowerPoint Live (since August 25, 2026, Windows): Attendees of a PowerPoint Live presentation in a meeting select text on a slide and have Copilot explain it in the side pane, without interrupting the presentation or having to ask. For trainings and town halls with mixed prior knowledge, a noticeable difference, because questions no longer fail at the threshold of speaking up.
• Skills in Copilot for PowerPoint (September 2026): Recurring work steps are stored as a skill and run on request. Built in are "Explain this presentation" and "Sharpen slide titles"; you can create your own skills in PowerPoint for the web and, since October 6, 2026, on Windows as well, and admins can distribute skills to individual people, groups, or the entire organization. In addition, connectors are available as a source directly in PowerPoint.
• Announced for October 2026: Brand Skills in the Brand Kit, meaning brand rules as a skill rather than as a template alone, and tasks that keep running after PowerPoint is closed and notify you on completion, across devices and sessions on desktop, web, and mobile.
• "Clarify my thinking" (GA since October 8, 2026): A built-in skill, formerly called "GrillMe", that challenges the reasoning and structure of a deck before it is presented. Mac, web, and desktop.
• "Record a Skill" (GA early October 2026, MC1490903): Record work steps and reuse them as a skill without having to write out the instruction yourself.
• "Create interactive slide" (from mid-October 2026, MC1461152): A skill for interactive slides on Windows, Mac, and web, accessible via the Home and Insert tabs. The slide stays interactive in PowerPoint Live in Teams. Requires a Copilot license.
• Referencing files on the Mac (since October 6, 2026): When creating, you can reference files from SharePoint libraries and OneDrive folders by name or owner (Roadmap ID 555897).

7.2 Images and visual explanations

• FLUX.2 Flex (since June 16, 2026): For image generation in PowerPoint, the FLUX.2 Flex model from Black Forest Labs is now available in addition, for high-quality visuals right in the deck.
• MAI-Image-2-Efficient (since July 1, 2026): Microsoft's speed-optimized image model, directly in PowerPoint. Meant for quickly iterating on image ideas and real-time slide content without leaving the workflow.
• Have shapes and images explained: Select a shape or an image and ask Copilot for a detailed, context-aware explanation (Win32).
• Multiple Organizational Asset Libraries: Edit with Copilot now pulls images from multiple SharePoint asset libraries (OALs), not just one.
• Assets from Adobe Experience Manager (since August 11, 2026, web and Windows): If the AEM Assets connector is connected, Copilot accesses the approved images from your digital asset management system when creating presentations. In the Image Source menu, you choose whether Copilot uses Microsoft 365 images or your organization's brand library. The cleanest route to brand consistency, because slides are built directly with approved assets instead of generated placeholders. Microsoft recommends enabling the feature only once you have more than 1,000 assets with well-maintained metadata (title, keywords, alt text), otherwise the matches come up empty.

7.3 Agent Mode with Work IQ (since July 1, 2026)

In Agent Mode, Copilot in PowerPoint no longer builds presentations from a single document only, but uses Work IQ to gather the relevant files, meetings, and emails on its own, naturally only those you have access to. That saves the manual hunt for sources and increases the relevance of the content.

• Reference a Teams meeting or chat: When creating with Agent Mode, you can reference a Teams meeting or a chat directly as a source.
• Reuse content and style from existing decks: Copilot can draw on an existing presentation and adopt its text, styles, themes, and visual formatting.

7.4 Theme and branding

Copilot in PowerPoint respects the default theme set by the admin. If your tenant has a DECAID or customer theme, it is applied automatically. Without a theme, Copilot uses standard Designer templates.

Where Copilot gets brand images from: There are three routes, and they are not mutually exclusive. The Brand Kit in Microsoft 365, the SharePoint Organization Assets Library, and the Templafy Image Library via a Graph Connector. You select in the Copilot input field via the plus sign and then "Select brand". As a rule of thumb, Microsoft cites at least 1,000 approved brand images with well-maintained metadata, meaning name, description, and tags, for the selection to produce useful hits.

Strict brand adherence and steering via slide notes (since August 2026): Two controls that belong together. Strict brand adherence restricts Copilot to approved templates and slide masters; no new placeholders and no invented layouts are generated, intended for official and regulated decks. Note steering goes the opposite way: plain-text instructions in the slide notes steer Copilot slide by slide and are re-read from the template on every creation. Combined, a template becomes something that ships its rules along with it instead of offloading them to a training document.

Brand Kits are getting leaner (since late September 2026, MC1483859): Newly created Brand Kits no longer contain fields for brand guidelines and style; according to Microsoft, Copilot did not use this information anyway. Existing kits remain unchanged. Brand rules belong in Brand Skills instead, which can be uploaded to the Brand Kit as a .md file from October.

Copilot in Outlook is the use case with the highest daily value. Mail drafting, mail recap, inbox triage, schedule planning. Inline in Outlook for the web, desktop (Windows), macOS, and mobile.

8.1 The most important workflows

• Draft with Copilot: Type in a few bullet points, and Copilot turns them into an email. Style and tone (Casual, Formal) via toggle.
• Summarize this email thread: Boil long threads down to three bullets, with action items and open questions.
• Coaching by Copilot, now in the chat (since August 11, 2026): Have your own email reviewed before you send it: tone, clarity, completeness. Coaching no longer runs in the canvas but in the chat, and it does so while you write, rephrase, and format. The key difference: you no longer have to accept all suggestions at once. You pick individual ones, have them refined further, and Copilot changes the email right there in place. Available on Windows, Mac, web, iOS, and Android.
• Meeting prep in classic Outlook for Windows (since August 11, 2026): Copilot pulls together the relevant context for an upcoming appointment, meaning the history, open tasks, and related documents, and you can dig deeper in the chat. Requires a Microsoft 365 Copilot license.
• Scheduling meetings from the chat, classic Outlook for Windows (since August 25, 2026): Via "Schedule with Copilot" or directly from the chat, Copilot finds suitable free time slots, books rooms, drafts an agenda, and sends out the invitation. Requires a Microsoft 365 Copilot license; the rollout is staged. Practical note: The invitation only goes out after you confirm it, so the draft is no substitute for checking who is being invited.
• Cleaning up the mailbox on request (since September 2026): Copilot can now also delete, move, copy, and categorize emails and manage inbox rules and folders. For bulk changes affecting more than five emails, Copilot asks first. Applies to classic and new Outlook, Outlook on the web, Mac, and mobile. For training, this is a change of perspective: Copilot in Outlook no longer just writes, it acts in the mailbox, and "Delete all newsletters from last week" is an instruction with real consequences.
• New Copilot design in Outlook (GA October 2026, MC1458470): Chat-centered like the Copilot app, with simplified navigation and a Work IQ switch. The full view gets a Tasks view for long-running activities such as agents and scheduled chats; the side pane does not. Microsoft recommends refreshing training screenshots. Teams gets the same design in October as well (MC1458472).
• New Copilot entry point in classic Outlook (from late October 2026, MC1441784): A unified entry point next to the ribbon with contextual suggestions.
• "Themes by Copilot" is being retired (mid to late October 2026, MC1492954): Active themes remain but are no longer updated.
• Announced for November 2026: Copilot Chat in shared and delegate mailboxes in classic Outlook (RM573698), as well as drafting and formatting emails in conversation in Outlook on the web (RM573280).
• What did I miss: Click "What did I miss" in an inbox. Copilot lists the critical emails of the last 24 hours, prioritized.
• Reply with a style specification: "Write a reply that makes it clear, friendly but firm, that we cannot meet the deadline".

8.2 Style trick

Copilot in Outlook can learn the style from your recent emails to a specific recipient. "Write in the style of my recent emails to Anna" produces replies that sound like your own, not like standard AI text.

Copilot in Teams is the killer feature for meeting productivity. Live recap during meetings, action item extraction, "What did I miss" when joining late, chat and channel analysis.

9.1 In meetings

• Recap on demand: During the meeting, ask Copilot "What have we decided so far?". The answer arrives in seconds, based on the live transcript.
• Extract action items: At the end, "List all action items with owner and deadline". Copilot pulls everything from the transcript.
• What did I miss: When joining late, one click and Copilot summarizes.
• Decisions tracking: "Which decisions were made in the meeting?"
• Sentiment check: "What was the mood in the discussion about point three?"

9.2 In chats and channels

• Channel recap: "What happened in the channel Sales DACH over the last two weeks?"
• Reply drafting: Have a reply suggested, adjust it before sending.
• Long thread summary: Collapse long discussions.

Translate a recap after the fact (since August 2026): A meeting recap that has already been generated now carries a translate button that lets you switch the language afterwards. For everyday work in DACH, this is one of the most practical small changes of the quarter: The meeting runs in German, the summary goes to an international parent company, and until now that meant copy-pasting into a translation tool, formatting damage included.

Copilot in the Queues app (September 2026): For recorded queue calls, there are AI-generated notes, key points, and follow-up tasks in the "Recap" tab, plus a Copilot chat area right next to it. Instead of reading through a transcript, you simply ask the call. Available on Windows and macOS.

Facilitator for in-person meetings in Teams Rooms (October 2026): Going forward, the Facilitator creates notes, decisions, and tasks for meetings that take place in the room as well, launched with a tap on the room console. The notes appear on the room display and are available via the meeting recap if they are shared. If nobody selects them, they are deleted, so no data is left behind in the room. Requires Teams Rooms Pro.

Teams Phone Agent (September 2026): An AI receptionist for Teams Phone in more than 60 languages that answers calls, schedules appointments, and forwards calls. It is not billed through the Copilot license but on a usage basis in Copilot Credits (see Chapter 3.5). For deployments in DACH, clarify before launch how callers will be informed that they are talking to an AI.

Recap app (GA since late August 2026, MC1404322): A dedicated Teams app bundles all meeting recaps from the last 30 days with filters and generates audio or video recaps, also across multiple meetings. It is preinstalled but not pinned, and the AI features require a Copilot license.

Planner plans generated from meetings expire (from October 2026, MC1479508): Plans that Copilot created from a meeting are deleted after 180 days without activity. If you use such plans as project memory, move them into a regular plan.

9.3 Requirements and admin policies

• The meeting must be recorded or transcribed, otherwise there is no recap data. The exception is the recap without a transcript described above, once it has arrived in your tenant.
• Participants must be informed in advance (a compliance obligation).
• M365 Copilot license for the person using it, not for all participants.
• Two modes for organizers: "During and after the meeting" requires a started transcript. "Only during the meeting" works with temporary speech-to-text data; nothing is stored. For sensitive formats, the second mode is the right tool.
• Meeting policy: CsTeamsMeetingPolicy -Copilot has four values, Enabled, EnabledWithTranscript, EnabledWithTranscriptDefaultOn, and Disabled. The default is EnabledWithTranscript, and it is enforced; organizers cannot change it.
• Call policy: CsTeamsCallingPolicy -Copilot applies to one-on-one and PSTN calls and has a different default, namely Enabled, meaning Copilot with or without a transcript. A recap after the call, however, is only available if it was transcribed.
• If the organizer turns Copilot off, recording and transcription are off as well.
• Up to 1,000 participants. In events optimized for large audiences, only for organizers, co-organizers, and presenters. Not available in end-to-end encrypted meetings and not in GCC High and DoD.

The Prompt Gallery is Microsoft's answer to "What do I even type into Copilot?". Three categories: Suggested (curated by Microsoft), Your Prompts (your own saved ones), Teams (shared in the workspace). Available in Copilot Chat, Word, Excel, PowerPoint, Outlook, and Teams.

10.1 Structure

• Suggested: ~300 prompts curated by Microsoft, filtered by app and role.
• Your Prompts: Your own saved prompts. Click the bookmark icon, "Save prompt".
• Teams: Shareable into an MS Team. Appears there persistently for all members.

10.2 Prompt format (GCSE pattern)

Microsoft recommends four building blocks:

• Goal: What should the end result be?
• Context: Who is asking, in which role?
• Source: What to access? ("/this email", "@channel")
• Expectations: Format, length, style.

10.3 Org-wide rollout

Workspace admins can roll out prompts tenant-wide via the Copilot Control Center. With analytics: how often the prompt was used, liked, copied. Helps you understand adoption.

Company-wide prompt publishing (since July 15, 2026): Organizations can now build their own prompt collections and publish them company-wide, managed in the Microsoft 365 Admin Center. The point: standardize prompts along your own processes and terminology instead of leaving every user to word them on their own. For enablement, this is the most practical lever in this chapter, because it lets you place your vetted prompts where people are looking anyway.

Delegating publishing (September 2026): Until now, publishing organizational prompts depended on the Microsoft 365 Admin Center, and thus on IT. Admins can now delegate this right to individual people, Entra security groups, and distribution groups. The delegated people create tenant-wide prompts via the Prompt Lab, edit and delete them, without getting access to the Microsoft 365 Admin Center. Oversight stays with the admin via the existing interface.

10.4 Microsoft's Prompt Hub

In addition: m365.cloud.microsoft/copilot-prompts. A publicly accessible catalog, now organized by activity (Popular, Ask, Learn, Create, Analyze, Code) instead of by role, plus "Get the basics" and app cards for Word, Excel, PowerPoint, and Outlook. The Prompt Gallery is additionally announced for OneDrive for October 2026 (RM571308).

Personalization is controlled in the Copilot Control Center. Custom Instructions are an explicit assignment; Memory is passive storage.

11.1 Custom Instructions

A global block that applies to all Copilot actions. Up to roughly 1,500 characters.

# About me
- Role: Sales lead at DECAID, B2B AI enablement DACH
- Tools: Outlook, Teams, SharePoint, HubSpot

# Response format
- Language: English
- Max. 200 words
- Bullet lists with action verbs
- Sources with citation

11.2 Memory

Copilot automatically learns facts about you from your interactions (role, ongoing projects, preferences). It lives in a hidden folder in the Exchange mailbox and is therefore subject to the same security and compliance rules as other mailbox data, including encryption at rest and Customer Lockbox.

• Three components: saved memories, details derived from the chat history, and the Custom Instructions.
• Editable under Settings, Personalization.
• Admin control via Enhanced personalization control, on by default. So no admin action is needed to activate Memory, only to turn it off. Reachable programmatically via Microsoft Graph as enhancedPersonalizationSetting. If the switch is off, users see the toggles under Settings, Personalization grayed out and cannot turn them on themselves.
• Correction to earlier versions: Memory is no longer limited to users with the Copilot add-on. Since September 2026 it has been available to Copilot Chat users without a license as well.
• Status: According to the Message Center (MC1158329), the GA rollout of Copilot Personalization and Memory has been running since mid-September and is expected to be complete by the end of October 2026, with redesigned Memory settings but no new admin controls. There is no completion notice yet. Where Memory is turned off, it stays off. Only list Memory as GA in your concepts once the rollout has reached your own tenant.
• Personalization with work data (GA rollout October 2026, MC1492154): Copilot additionally personalizes responses with inferences from your Microsoft 365 work data, not just from the chat history. Users turn this off under Settings, Personalization with the new "Chat History and Work Insights" toggle, admins via enhancedPersonalizationSetting. Microsoft does not require any admin action. For the works council and data protection, it is still an expansion that should be raised, because the toggle is on by default.
• Memory citations (GA October 2026, RM574111): Under Sources, Personalization, Copilot shows which Custom Instructions, saved or learned memories, and earlier chats influenced a response. For the first time, this makes it possible to trace why Copilot "knows" something.

11.3 When to use what

• Global persona for all chats: Custom Instructions.
• Concrete facts: Memory.
• Recurring workflow: Declarative Agent (Chapter 15).

Copilot Pages are collaborative Loop canvases. You can start one straight from a Copilot answer, several people can edit it in parallel, and you can enrich it with live components. Comparable to Notion pages or Google Docs, but with native Copilot integration.

12.1 What Pages are for

• Brainstorm doc: Copilot generates a first version, the team refines it in parallel.
• Meeting prep: Agenda with live components (tasks, data tables, polls).
• Project plan: Central doc with embedded tasks from Planner.
• Briefing: Structured briefing with sources from mail and Drive.

12.2 How to create a Page

1. Generate an answer in Copilot Chat.
2. Click "Edit in Pages". The answer becomes a Page.
3. Share it with colleagues via "Share" and enable live editing.
4. Insert Loop components (task list, table, voting).

12.3 Availability, storage location, and admin switches

Pages require a SharePoint license. They are stored as .page files, specifically in the same user-owned SharePoint Embedded container as "Loop My workspace". The storage counts against the SharePoint quota.

New storage location from mid-October 2026 (MC1449182): Newly created Copilot Pages (from Chat and the Copilot app) and new Copilot Notebooks are stored in OneDrive for Business instead of the Loop container. This brings OneDrive governance, retention, and lifecycle into play. Worldwide rollout from mid-October to the end of November 2026, in GCC, GCC High, and DoD from mid-November to early December. Existing content stays where it is. The following notes on the Loop container therefore apply to existing content and to the transition period.

A side note on turning it off: with the policy disabled, the Pages module stays visible in the app, the Notebooks module is hidden. Existing content is not deleted and remains readable and editable via the Loop app, the Copilot app, and the original storage locations. Sharing links to Notebooks, however, no longer work then.

Copilot Notebooks are Microsoft's answer to NotebookLM. Source-grounded knowledge work: you drop in files, SharePoint sites, Pages, and web links, and Copilot answers questions exclusively on that basis.

13.1 What Notebooks do

• Source-grounded Q&A: Answers are based exclusively on the sources you added.
• Multi-source synthesis: Cross-referencing across all sources.
• Citation pin: Every answer points back to the original source.
• Audio Overview: Podcast-style recap (since 2026). Audio Overviews have been available directly in OneDrive Copilot as well since May 2026 (per the Service Description update of May 11, 2026).
• Infographics (since June 2026): Notebooks automatically generate shareable visual summaries from the notebook content.
• Mind Maps (GA since July 1, 2026): Interactive visual artifacts that present the notebook's core topics, themes, and connections as a navigable map. Clicking an individual node shows a summary, and you can ask follow-up questions about any node via the notebook chat. Available in OneNote and in the M365 Copilot app.
• Redesigned Overview page (since July 29, 2026): The overview page of a Copilot Notebook has been rebuilt: a more concise AI summary, highlighted Key Insights, and the available artifacts directly visible, each creatable with one click. Available in OneNote for Windows, Mac, and web.
• New Notebook interface (since August 25, 2026): Microsoft has simplified the flow for opening items and the navigation within Notebooks and unified it across the various entry points. Purely visual, nothing changes functionally, but screenshots in training materials are now outdated.

13.2 Generating documents and decks from Notebooks (GA since July 1, 2026)

Notebooks are no longer just a question-and-answer tool: from the curated notebook context, Copilot generates finished Office files that you continue editing directly in the respective app. No more manually transferring notes.

• PowerPoint: Copilot builds a structured, editable slide deck from the notebook's content and sources, which you open and refine in PowerPoint.
• Word: Copilot creates a structured document draft, grounded in the notebook context, editable in Word.
• Excel: Copilot generates a structured table from the notebook content, which you open and continue editing in Excel.

13.3 Possible sources

• OneDrive and SharePoint files (PDF, Word, Excel, PowerPoint)
• OneNote notebooks
• Web URLs (HTML is reduced to text)
• Copilot Pages
• Plain-text paste
• Markdown, plain text, and rich text (since August 2026): Notebooks now accept .md, .txt, and .rtf directly as sources, without prior conversion to Word or PDF. Microsoft names technical documentation, README files, runbooks, wiki exports, logs, transcripts, and AI-generated Markdown output as typical cases. The rollout ran worldwide from late July to early August 2026, no admin configuration is needed for Markdown support in OneDrive and SharePoint storage, and existing permissions apply unchanged.
• Outlook emails (since August 25, 2026, Windows and web): Individual emails can be placed in a notebook as a knowledge source. That puts the thread in which decisions were actually made into the same context as the files, and the decks and briefings generated from it become correspondingly more reliable.
• Teams meetings (since August 25, 2026, Windows, web, Android, and iOS): Meeting content can be linked as a source, specifically transcripts, notes, meeting chat, and shared files. As always, the prerequisite is that the meeting was recorded or transcribed.
• Power BI reports (public preview since late September 2026, GA from late October according to MC1474458, Windows and web): For the first time, it is not a file but a report that comes into the notebook as a reference. Copilot uses the report data for summaries, presentations, and briefings. The real boundary remains the permissions and row-level security in the Power BI workspace, not the notebook.
• CSV and TSV files (rollout September 2026): Structured tables can be added directly as a source, without the detour through an Excel conversion.
• JPG and PNG images (rollout September 2026): Images are added as a reference, and Copilot reads text and content from them. That means photographed whiteboards, screenshots, and diagrams.

Two connected Notebook modes (since August 2026): There is now a lightweight variant in the Copilot app and the full workspace experience in OneNote. Both show the same content, you switch via "Open in OneNote". In practice that means: quickly drop something in and ask in the app, work in a structured way in OneNote.

Multimodal capture on Android and Windows (rollout September 2026, postponed to late October for Windows according to MC1405506): Audio, images, and notes are recorded in a single capture session, Copilot turns them into structured notes with insights, decisions, and tasks and files them in the selected notebook. On iPhone and iPad this is already available in OneNote. Note for DACH: Wherever recordings are made, the obligation to obtain consent lies with you, not with Microsoft. Clarify the use case before you promote the feature broadly.

Proactive artifact suggestions (since August 2026): Based on Work IQ and the notebook content, Copilot proactively suggests concrete Word, Excel, or PowerPoint outputs instead of waiting for someone to ask for them.

13.4 Sharing

• By adding users: Invite individual people.
• By M365 Group: Since 2026: share a notebook with an entire Group, access updates automatically with Group membership.

13.5 Availability

Since June 2026, Copilot Notebooks are accessible to all Copilot Chat users (Commercial and Education), in the Microsoft 365 Copilot app and in OneNote. Full Microsoft Graph access to SharePoint and OneDrive sources, however, remains tied to the M365 Copilot license.

• OneNote on the web (since July 1, 2026): Copilot Notebooks can now be used in OneNote in the browser (onenote.cloud.microsoft) as well.
• OneNote for iPhone and iPad (since July 1, 2026): Copilot Notebooks directly in OneNote on iOS.
• Multimodal capture on iPhone (since July 1, 2026): Transcribe audio, capture images, and type text in one session, and Copilot organizes everything into a structured page.

13.6 Notebooks update October 2026

On October 9, 2026 (updated October 12), Microsoft announced the largest Notebooks update to date. Most of it initially runs through the Frontier program:

• Redesigned interface (Frontier): Content and artifacts can be grouped and reordered in the navigation pane, in the Copilot app and in OneNote.
• Delegating tasks (Frontier): Copilot maintains sources, summarizes the project context, and creates or edits individual Word, Excel, or PowerPoint files from the notebook chat. The scope can be toggled between "notebook only" and "Work and web".
• Model choice in the notebook chat (Frontier): "Think deeper" or a specific GPT model, with more models announced.
• Office files directly on the canvas (Frontier): Editing, including together with others, plus interactive reports and PDFs via chat.
• In the coming weeks: Having a notebook created from a goal description, scheduled tasks (Automations) such as a daily briefing or a weekly status deck, and extended Audio Overviews with Outlook emails, Teams meetings and chats, OneNote and Loop pages, and .txt as sources, the new "Critique and Debate" format, storage in OneDrive, and inheritance of sensitivity labels.
• Sources from search (since September 23, 2026, web): Results from Quick Access in Copilot Search can be added straight to a notebook via "Add to, Notebook" (Roadmap ID 510099).

Microsoft 365 Copilot Connectors (formerly "Graph Connectors") bring external data into the Microsoft Graph. Salesforce, ServiceNow, Confluence, Stack Overflow, GitHub, Jira, and many more: once connected, the content can be referenced in Copilot answers with a citation. As of June 2026: over 100 prebuilt connectors, plus MCP-based Federated Connectors for real-time access. The Federated Copilot Connectors have been generally available since June 2, 2026, and the release notes of September 23, 2026 list the GA as new once again. Where they now apply is covered in Chapter 14.5.

14.1 Synced vs. Federated Connectors

14.2 What connectors do

• External data search: Copilot searches external sources just like your own SharePoint sites.
• Permission trimming: Only content the user is allowed to see in the original source is shown.
• Semantic indexing (Synced): Improves relevance ranking. Semantic labels filter without changing the ranking.
• Custom configuration (since May 2026): Icons, visibility, metadata, property descriptions, and semantic labels can be configured via the Graph API.
• ServiceNow connections are editable (since July 1, 2026): Existing ServiceNow Knowledge and Catalog connections can be edited after the fact to switch between simple and advanced permission handling.
• Metadata awareness in SharePoint queries (since July 1, 2026): Copilot queries against SharePoint libraries or folders now use the column metadata, which improves the accuracy and relevance of the results.
• ServiceNow user mappings and query filters editable after the fact (since July 29, 2026): The user mappings and query filters of the ServiceNow connector can now likewise be changed in the existing connection instead of having to recreate it. This lets admins control more precisely which data is queried and how users are mapped, without interrupting the connection.
• Nested permissions for Confluence and ServiceNow (since July 15, 2026): Both connectors now evaluate hierarchical ACLs, meaning permissions set at the parent level for the items beneath it. Permission trimming is more precise as a result where rights in the source are inherited rather than set per item.
• Content and identity crawl run in parallel (since August 11, 2026): During a full crawl, the content used to run first, then the identities (users, user criteria, group memberships). Now both runs happen at the same time. New content becomes available in Copilot faster without loosening anything about the accuracy of the permissions. For the rollout of a large connector, this mainly means a shorter wait until the first usable result.
• Role-based permissions for ServiceNow (since August 11, 2026): The connectors for ServiceNow Knowledge and Catalog now evaluate the roles assigned in the source system (such as admin, knowledge manager, knowledge admin) instead of only simple access lists. Permission trimming for knowledge articles and catalog items becomes considerably more granular as a result.

14.3 Pre-built connectors (selection)

• Collaboration: Jira Cloud/Data Center, Confluence Cloud/On-prem, Trello, Miro, Zoom Meetings, Azure DevOps, Notion (Preview), Linear (Preview).
• CMS/knowledge: MediaWiki, Salesforce Knowledge, ServiceNow Knowledge, Stack Overflow, Guru, SharePoint Server, WordPress, Veeva Vault.
• CRM: Salesforce CRM, HubSpot (Preview).
• Files: Amazon S3, Dropbox, Google Drive, Azure Data Lake/File Share/Blob, File Share (on-prem).
• Digital asset management: Adobe Experience Manager Assets (Cloud). Indexes published assets (images, videos, PDFs, design files) for Copilot and Microsoft Search, with crawl frequency as well as path and metadata filters. Important limitation: This connector crawls no identities and no permissions, so all indexed assets are visible to every user in the tenant. Only connect published, approved libraries. AEM Sites needs its own connector.
• Dev: GitHub Cloud/Server (issues, PRs, knowledge), GitLab, Bitbucket.
• HR: BambooHR, Workday, SAP SuccessFactors, 15Five, Credly.
• ITSM: ServiceNow Tickets/Catalog, Freshservice, PagerDuty.
• Federated/MCP newcomers: HubSpot, Notion, Canva, Linear, LSEG, Moody's, Intercom, Google Calendar, Google Contacts. As of October 2026, the federated catalog comprises around 200 entries in 16 categories; relevant for mid-sized companies are, among others, Gmail, Asana, monday.com, awork, Smartsheet, Airtable, Templafy, Egnyte, Miro, Trello, Make, Fireflies, Gamma, PandaDoc, and Zoho Books.
• Industries and specialist data (since September 2026): Industry connectors and plugins such as Autodesk, Dun & Bradstreet, PubMed, and NielsenIQ, plus an Azure DevOps MCP connector with write actions that require confirmation (GA mid to late October, MC1479505) and Dynamics 365 Sales and Service skills for Cowork (MC1492151).

14.4 Microsoft Work IQ API

The intelligence layer behind Copilot, now usable for your own applications as well. Work IQ reasons across emails, meetings and calendar, OneDrive and SharePoint documents, Teams messages, people and org context, Planner plans, and enterprise search results, all of it consistently permission-trimmed. Permissions, sensitivity labels, and compliance policies apply automatically.

• Three protocols: A2A (Agent-to-Agent) for delegation between agents, MCP (local and remote) for IDEs, CLIs, and AI coding assistants, and REST for apps and services that call Work IQ programmatically.
• Unified REST endpoint (since August 25, 2026): A single entry point for calling agents and workflows, intended as a consistent and better-scaling replacement for the old Copilot Chat endpoints. Microsoft explicitly names Work IQ as the recommended foundation for new development; anyone still building on the chat endpoints should plan the switch.
• Authentication: Entra ID with delegated permission, requests run in the context of the signed-in person, on-behalf-of is supported. There is no application-only authentication, so a background service without user context cannot be built with it.
• Billing: consumption-based via Copilot Credits, independent of the Copilot license (see Chapter 3.4).

14.5 Setup

Setup is admin-only, not end-user. A workspace admin connects the connector in the Microsoft 365 Admin Center, maps permissions, and releases it to selected user groups. According to the documentation (as of September 30, 2026), Copilot Connectors are available in Commercial as well as in GCC, GCC High, and DoD; for Federated Connectors, availability varies by connector.

Where Federated Connectors now apply: The list has grown further and, according to the documentation (as of October 14, 2026), comprises Copilot Chat, agents, Copilot Cowork, Copilot in Word, Excel, PowerPoint, and Outlook, and the Researcher agent, which explicitly has read-only access. Federated Connectors published by Microsoft are active by default, partner connectors need admin approval, and a staged rollout via Entra groups is possible. Important for ownership: Federated Connectors connect with the credentials of the individual person (Copilot Chat, then Settings, Sources, Connect), while Synced Connectors connect with admin credentials at the organization level. Both can run in parallel.

Self-created Synced Connectors (Preview since August 2026, GA September 2026): Users can connect their own external sources, initially announced are Jira and Confluence Cloud, with their own credentials and permissions. The content is synchronized and afterwards discoverable in Copilot Chat and Microsoft Search. The difference from Federated Connectors is decisive exactly here and is easily confused in customer conversations: Here the content is indexed, there it is not. Admins keep control over staged rollout, visibility, and shutdown.

Federated Connectors can now write as well (rollout from early October 2026): Until now, MCP connectors were read-only. Now actions to create, update, and delete in the source are being added. Every write action requires confirmation from the person, with the options "Allow once", "Allow for this conversation", "Always allow", and "Cancel". Read tools run without a prompt. This is managed under Settings, Sources, Write/Delete tools; Researcher remains read-only in principle, and the activity is auditable in Purview. For governance: "Always allow" is convenient and undermines exactly the control that matters here. For systems with external impact, such as CRM, ticketing, or accounting, your usage policy should state that write actions are confirmed individually.

Tools view per connector (announced): Under Copilot connectors, Your connections, Connector, Tools, admins see each tool, after signing in themselves, labeled Read, Write, or Delete. Users switch each tool between "Needs approval" and "Always allow". If a provider changes a tool or adds a new one, it reverts to "Needs approval". Write tools cannot be enabled separately from the connector; they belong to it.

Connector management without a support ticket (since September 23 and October 6, 2026): Admins get guidance before setup, can edit connections afterwards, and receive clearer error messages along with alerting (Roadmap ID 502529). Since October 6, query string and identity mapping rules can be changed for all Copilot Connectors by admins themselves, under Settings, Search & intelligence, Data sources. Previously this was only possible for ServiceNow.

New in the catalog, with DACH relevance: The Federated Connectors now include a Klardaten DATEV connector and a DeepL MCP connector, plus, among others, Mercury, Xero, iManage Work, Harvey (with its own EU variant), Everlaw, Statista, Box, Notion, Linear, and Microsoft Learn.

Federated Connectors in the Admin Center (since July 15, 2026): The MCP-based Federated Copilot Connectors can now be rolled out and managed in the Connectors tab under Copilot in the Microsoft 365 Admin Center. They authenticate at runtime with the user's identity, so they need no indexing of the organization's data, and the permissions of the source system are preserved. A strong argument in data protection discussions: the data never leaves the source.

14.6 Plugins and the Plugin Registry (since September 30, 2026)

On September 30, 2026, Microsoft reorganized its developer documentation around a new core concept: the plugin. A plugin is a versioned package that can bundle a declarative agent, skills, Copilot connectors, and MCP servers. Existing API plugins remain supported as actions for declarative agents.

• Plugin Registry: A shared catalog for plugins from Microsoft, partners, and your own organization, according to Microsoft with more than 100 entries, including HubSpot, Asana, Linear, Canva, Notion, and MongoDB. Users find them via a Plugins menu in Chat and Cowork, in Code and Autopilot, in the Office apps, and in SharePoint.
• Management: In the Microsoft 365 Admin Center under Agents, Tools, where plugins are approved, assigned, blocked, and deactivated. Important: publishing alone does not make a plugin usable; review, assignment, and activation are separate steps.
• Status: Microsoft's September overview lists the registry as available, while the announcement from September 25 speaks of "rolling out, GA in the coming weeks". Expect that it may not yet be visible in every tenant. According to MC1484008, a "Plugins" button will replace the previous entry points "Agents", "Agents & Skills", and "Customize" between late October and late November.

Declarative Agents are Microsoft's counterpart to Custom GPTs. Specialized Copilots with their own instructions, knowledge, and actions, hosted in M365, built on Copilot's orchestrator and foundation model. You can create them in the Agent Builder (low-code, in microsoft365.com/chat, office.com/chat, and Teams desktop/web, not mobile) or in the full-featured Copilot Studio. If you need more control (your own model, your own hosting, proactive messaging, external channels), you turn to Custom Engine Agents.

15.1 What a Declarative Agent is

A JSON manifest following schema 1.8 (current version, as of October 2026), plus icon files, plus optional action files. The instructions can be up to 8,000 characters long. Required fields in the manifest:

{
  "version": "v1.8",
  "name": "DECAID HR Assistant",
  "description": "HR assistant for DECAID employees",
  "instructions": "Answer in English. For policy
    questions, ALWAYS refer to the HR handbook.",
  "conversation_starters": [
    { "title": "Vacation", "text": "How do I request vacation?" }
  ],
  "capabilities": [
    { "name": "OneDriveAndSharePoint" },
    { "name": "WebSearch" }
  ]
}

15.2 Sharing levels

• Personal: Only you.
• With people: Shareable via link.
• Share to Teams (since April 21, 2026): Share an agent directly into a Teams team, optionally with a notification in the main channel. Makes agents discoverable in Teams without going through the admin approval path.
• Workspace: Via the Microsoft 365 Admin Center, Agent Registry. Discovery flow: a user finds an agent in the Agent Store in the M365 Copilot app, sends an Agent Request to the admin, and the admin publishes or rejects it via the Agent Registry. Available in GCCH and GCCM since spring 2026 as well.
• Submitting to the Agent Store directly from the Agent Builder (since July 15, 2026): If you built an agent in the Agent Builder, you can submit it for publication in the Agent Store, where it appears under "Built by your org". Admins review and approve the submission in the Microsoft 365 Admin Center. This gives you a cleanly governed way to share vetted agents across the organization instead of passing them around by link.
• Public: Via the Microsoft 365 Agents Store for other tenants.
• Classic Outlook for Windows (since September 23, 2026): Declarative Agents now also run in Copilot Chat in classic Outlook, with plugins, Adaptive Cards, card actions, task modules, and mail and calendar actions (Roadmap ID 481559).

15.3 Setup in Agent Builder Lite

1. In Copilot Chat, click "Agents", then "Create new".
2. In the conversational builder, type a description into the chat. MS generates a first manifest.
3. Edit the manifest in "Code view" or adjust the fields one by one.
4. Enable capabilities (OneDrive, SharePoint, Web, Graph Connectors).
5. Choose a sharing level, publish.

15.4 Availability

• Creating in Agent Builder Lite: Copilot Chat (including free) plus Pay-as-you-go.
• Creating in Copilot Studio: Studio license.
• Using: Works in free Copilot Chat too, via metered consumption.
• Skills in Declarative Agents (GA since late September 2026, MC1476977): Until now, an agent's capabilities lived as running text in the instructions, where they ran into the character limit. A Skill is instead a directory with a required file SKILL.md (YAML header plus instructions under 20,000 characters) and optional resources and scripts. Limits: a maximum of 8 Skills per agent, 350 files in total across all Skills, directory depth of at most 3. Execution runs in a sandbox without network access, without package installation at runtime, and without authenticated calls, so scripts cannot reach connectors, API plugins, or MCP servers; that stays reserved for the orchestrator. Known limitations: Skills and embedded files cannot be combined yet, and tenants with Information Barriers are not supported yet.
• Manifest schema 1.8 (since July 2026): Two new capabilities are notable because they take agents beyond reading for the first time. EmailActions allows write operations on email: archive, flag, mark as read, move, copy, report as junk, send with approval, delete, create and query inbox rules, out-of-office message, and folder management. MeetingActions allows creating appointments and setting up meeting polls. Important for governance: EmailActions is independent of the read capability Email, and the restrictions defined there for specific folders, shared mailboxes, or group mailboxes do not apply to it. If you carefully scoped read access, you have not scoped write access yet.
• Do not outsource instructions: Microsoft now explicitly warns against moving instructions into SharePoint documents to get around the character limit. Content from knowledge sources passes through the XPIA classifier against cross-prompt injection and can be blocked, truncated, or sanitized at runtime. So the workaround does not work reliably, and it is exactly the route a prompt injection would come in through.
• Work IQ Dev Tools (Preview, since August 2026): For teams that build Declarative Agents in the terminal rather than in the browser, there is a dedicated command-line tool, wiqd. It covers the full lifecycle: create a project, validate the manifest, provision, package, publish, and monitor the running agent. Relevant for IT or external service providers, not for builders in the business units.
• Scheduled prompts in the Agent Builder: Run prompts on a schedule, from hourly to yearly. According to MC1302906, GA has been postponed to late October to late November 2026 (previously September).

Copilot Studio is the full-featured agent builder. Separate license (tenant pack or Pay-as-you-go), maker role required. With it you build complex multi-step agents with Power Automate flows, your own channels (web, Teams, Slack, telephony), customer service handoff, and multi-agent structures (child agents). Native MCP support since 2026 (Model Context Protocol), plus Computer Use as a tool (RPA-style browser control) and Code Interpreter for Python.

16.1 Studio Lite vs. Studio Full

16.2 When to use Studio Full

• Multi-channel bots (e.g., the same agent in Teams and on the external website).
• Complex topic flows with conditions and loops.
• Power Platform integration (CRM connection, workflow automation).
• Custom engine agents with your own models.
• Real-time Voice Agents (GA since April 27, 2026): Speech-to-speech agents that listen, reason, and respond naturally. Premium feature in Copilot Studio, intended for contact center and telephony use cases.
• MCP servers, Computer Use, Code Interpreter: Connect MCP servers directly in Studio (tools and resources), RPA-style browser control via Computer Use, Python execution in the prompt via Code Interpreter.
• Agent Flows in natural language: Flow authoring by description instead of drag-and-drop.

16.3 When Lite is enough

For 80 percent of use cases, Agent Builder Lite is enough. Personal bots, small teams, simple knowledge and action bots. Lite can be used without IT approval (as long as the tenant policy allows it).

16.4 Agent Evaluation (since June 2, 2026)

Copilot Studio ships with a built-in framework for checking the quality of agent responses systematically instead of relying on manual testing alone:

• Expected response in test cases: Makers define an expected response per test case, either manually or via file import. Several evaluation methods are available.
• Grader framework: Responses are scored flexibly, via exact match, similarity, intent, and AI-assisted metrics. That lets you measure before publishing whether an agent reliably delivers the right thing.

16.5 Human approval for individual tool calls (September 2026)

This is the most important governance addition to Copilot Studio this quarter. Makers can specify per tool and per agent that a call requires human approval. When the agent hits a tool flagged this way, it stops and shows an approval request with the intended action. Approve, approve for the current session, or reject. The requests appear directly in the respective channel, including Teams and Microsoft Copilot.

16.6 What else is changing in Copilot Studio

• Sharing agents among makers (Preview September, GA October 2026): Two roles: Agent Viewer may view analytics and evaluations, Editor may view, edit, configure, share, and publish. The required security roles are set automatically. The Viewer closes a gap that in practice was often bridged with "just give me Editor".
• Agent creation becomes app-first (October 2026): The starting point changes fundamentally. Instead of beginning with an empty agent, you first choose the application the agent should work with and then configure the required capabilities. Tools and knowledge sources move together into a shared interface. If you maintain training materials with screenshots from Copilot Studio, plan the effort for this now; it affects practically every screenshot.
• Improved Agent Evaluations (September 2026): More detailed explanations, reasoning traces, the knowledge sources cited per test case, comparison of two runs, larger datasets, configurable test case generation, and test data straight from the knowledge sources. Plus an upfront validation that warns about configuration errors.
• Three harnesses instead of two (documentation as of September 21, 2026): Copilot Studio now asks before building which foundation an agent should run on. The GitHub Copilot harness (GA and default since August 3, 2026) for multi-step reasoning, skills, memory, and creating Word, Excel, PowerPoint, and PDF files in a sandbox, billed in Copilot Credits. The Standard harness for rule-based agents and agent flows. And, new, the Copilot chat harness, which extends Copilot Chat, is published internally only, and runs on the Copilot license or on a consumption basis. Important for cost planning: with the GitHub Copilot harness, according to Message Center reports, even building, testing, and evaluating consume credits, regardless of the Copilot license. Apps in Copilot Studio run as a paid public preview.
• Keeping an eye on costs while building (September 2026): Copilot Studio now shows costs in the test chat, in evaluations, and per agent in the Monitor tab.
• Setting up connectors in the conversation (September 2026): Sign-in and configuration of a connector happen in the chat instead of through the full settings interface.
• Responses blend in more seamlessly (September 2026): Responses from Copilot Studio agents look like native responses in Copilot Chat: same formatting, condensed chain of thought, smoother streaming, continue and retry, voice input, clickable citations, and traces of tool execution.

16.7 New in September and October 2026

• Extract node in workflows: Pulls named values and tables from invoices, contracts, or financial statements.
• Copilot node (preview): Runs Copilot Chat or a Cowork task within a workflow, grounded in mail, files, calendar, and chats, and can call Researcher, Analyst, or your own Agent Builder agents.
• Model choice in the GitHub Copilot harness: Via dropdown, including experimental models. Opus 5.5 and Sonnet 5.5 are available there.
• Content safety tests in evaluations: A new test method for hate, sexual content, violence, and self-harm with configurable thresholds.
• File attachments and Dataverse: File attachments in the conversation are GA, now including Word, Excel, and PowerPoint. Dataverse tables can be connected as a knowledge source, in preview also with reasoning over multi-line text and file columns.
• Apps in Copilot Studio (public preview since early October 2026, MC1469329): Build working apps through natural language, with data model, logic, and interface, preview, code view, publishing, and sharing. Runs on the GitHub Copilot harness; building, preview, testing, and use consume Copilot Credits. Always uses a personal environment, is on by default and can be turned off by admins, and data access runs with the identity of the signed-in person. Apps in Copilot Studio and in Copilot Cowork replace the App Builder Agent (see Chapter 19.15).
• Entra Agent ID for all agents (MC1478488): Since September, Copilot Studio agents have been automatically switched to Microsoft Entra Agent ID; agents from before May 2026 may still use app registrations.
• Rename: The setting "Copilot Studio Authors" is now called "Copilot Studio pay-as-you-go users" (MC1483430).

SharePoint Agents are a special variant of Declarative Agents that are automatically scoped to a SharePoint site, a library, or a set of files. Introduced in summer 2024, extended since 2026 with "AI in SharePoint" (auto-metadata, automatic library structuring).

17.1 What for

• "Ask the employee handbook": A site with HR policies becomes a bot.
• "Ask the project documentation": A project site with all specs as Q&A.
• SharePoint List Agent: Specialized in structured lists, answers data-oriented questions.
• Onboarding bot: New employees ask questions, the bot pulls from the handbook.
• SharePoint Admin Agent (since May 19, 2026): A dedicated Microsoft first-party agent that helps SharePoint admins with tenant management in natural language (site insights, permissions reports, lifecycle tasks). It does not sit on a user site but in the admin context.
• Copilot in SharePoint: build sites by describing them (since July 29, 2026): The SharePoint start page has a Build area where you describe in a text field what you need. Copilot plans the SharePoint solution from that and generates the site, which you then adjust. This gets teams with no SharePoint experience to a usable structure as well.

17.2 Setup in two clicks

1. On a SharePoint site: click "Create an agent" in the top bar.
2. Choose the scope (entire site, selected library, individual files).
3. The agent is created with a default manifest. Optionally adjust the instructions.
4. Share via site permissions, or publish externally via the Agent Store.

17.3 Skills: from the site to the person (since August and September 2026)

• Personal skills that travel with you: A skill is stored as a Markdown file in OneDrive and thus belongs to the person, not the site. Once created, it is available across all SharePoint sites and in OneDrive. Public Preview since August 2026, announced worldwide for December 2026.
• Site skills with version management (September 2026): Skills at the site level can be edited, versioned, published, restored, and duplicated to other sites. For the first time, a well-built skill becomes something you can pass on cleanly instead of rewriting it per site.
• Skills with measured evaluations: Copilot generates test cases and evaluation criteria for a skill and, on that basis, proposes measured changes instead of blindly rephrasing it.
• Image understanding across entire libraries: Answer questions about images without opening them one by one, including text extraction at larger scale.
• Tenant-specific HTML guide: At https://[tenant].sharepoint.com/_html every tenant has an automatically updated guide on what HTML must look like to work in the SharePoint sandbox, including live-linked SharePoint lists. You can point Cowork, GitHub Copilot, or Copilot Studio to it.

Management is moving (September 2026): SharePoint Agents will in future be managed as Shared Apps in the Integrated Apps area of the Microsoft 365 Admin Center, together with the other Copilot agents. A dedicated tab for shared agents allows direct blocking and approval. So far these points come from the SharePoint product blog and not yet from the Learn documentation, so treat them as announced.

17.4 Availability

• Creating: A Copilot license plus the right to add files to the site. Owner rights are not required.
• Using: M365 Copilot license for full access, alternatively pay-as-you-go billing via a security group.
• Can be switched off granularly: Via the service plan "Microsoft Copilot for SharePoint" per person. Caution, this additionally switches off Copilot in OneDrive and the Copilot for SharePoint page authoring, so it is not a surgical cut.
• Restricted Content Discovery on a site switches off all agent functions there, the icon disappears, and the content is no longer available to other agents either.
• DLP note: .agent files currently cannot carry a sensitivity label. You therefore have to base DLP conditions on the file extension, not on labels.

17.5 Copilot in SharePoint is GA (rollout since September 30, 2026)

Copilot in SharePoint, meaning building sites, creating content, and managing skills, is generally available. Copilot in OneDrive has been rebuilt on the same foundation. Everyday use is included in the Copilot license, including "Create and manage skills". What is new is a second tier:

• "Advanced work" costs credits: Large-scale synthesis and generating entire sites, skills in scheduled automations, real-time autofill, image generation, and site analytics are billed via Copilot Credits. This requires a Spending Policy under Copilot, Cost management with the service "Advanced work in SharePoint", and the equivalent for OneDrive.
• Cost transparency for users: A confirmation appears before credits are consumed, /cost shows the current status, and a warning appears when 20 percent of the monthly limit remains. The weekly limits from the preview no longer apply.
• Controls are moving: The PowerShell controls from the preview (KnowledgeAgentScope and related settings) are deprecated. Existing settings remain in effect until November 1, 2026; after that, availability is controlled via the site AI settings and Restricted Content Discovery. Not available in GCC, GCC High, DoD, and 21Vianet.
• Frontier: Copilot Search becomes the default search in SharePoint and OneDrive, SharePoint content flows into Work IQ, and there are SPFx experiences directly in Copilot Chat as well as SharePoint tools in Work IQ.
• SharePoint Page Agent is being retired: The Frontier agent for pages disappears between mid-October and mid-November 2026, replaced by Copilot in SharePoint (MC1481325). At the same time, targeted selection of individual page elements for Copilot editing is GA (MC1478958).

Agent Flows are Power Automate cloud flows "in agentic mode". They can evaluate context, make decisions, and branch. Triggered manually, by other agents, or on a schedule.

18.1 What for

• Multi-step approvals: An email comes in, the agent evaluates the content, forwards it to the right approver, archives it.
• Lead routing: New form submission, the agent qualifies it, enriches the CRM record, sends a Slack notification.
• Recurring reports: Pull data from several sources weekly, build the report, send it to stakeholders.

18.2 Prerequisites

• Power Automate Premium license or Copilot Studio Capacity
• Maker role in the Power Platform
• Connector licenses for external systems

18.3 What shifted in 2026

• Agent Flows belong to the Standard Harness. Microsoft now explicitly assigns them to the classic agents (for the three harnesses, see Chapter 16.6). The counterpart in the newer GitHub Copilot harness is called Workflows and is not the same thing. Converting an existing Agent Flow into the new Workflow format is not planned.
• Capacity instead of license: Every executed action consumes Copilot Studio Capacity. Once the environment's prepaid capacity is used up, new runs are blocked, while flows in progress are still run to completion. Exempt are users with a Microsoft Copilot license as well as test runs in the flow designer and in the test chat.
• Conversion from Power Automate is one-way: The cloud flow must be in a solution, the plan is switched to Copilot Studio, and that cannot be undone. Keep a copy before converting.
• "Scheduled" becomes "Automations": In Copilot Cowork, the renamed tab bundles scheduled and event-driven tasks in one place (see Chapter 3.4).
• Planner agent chat in Basic Plans too (September 2026): Natural-language questions, smart task search, and task management directly in the plan, now in group-based Basic Plans as well. On top of that comes the Planner integration in Copilot itself: create tasks and query task information, rollout September 2026.

18.4 Reality in the mid-market

Agent Flows are a champion track. Case workers will not build them themselves. If your mid-market team has a Power Platform maker, getting started is worth it. Otherwise: Declarative Agents are enough for most use cases.

Microsoft 365 Copilot is managed centrally through the Copilot page in the Microsoft 365 Admin Center and the Copilot Control System (CCS). CCS bundles three pillars: Management Controls, Security & Governance, Measurement & Reporting. Anyone with admin rights in the tenant finds the levers for licenses, data access, agents, and compliance here.

19.1 Copilot page in the Microsoft 365 Admin Center

Central entry point: admin.microsoft.com → Copilot → Settings. Four tabs:

19.2 AI Administrator role (least privilege)

Microsoft explicitly pushes for least privilege. AI Administrator is the recommended role for Copilot tasks, not Global Admin.

• AI Administrator: Manages Copilot settings. Since May 2026 it can be used in the Pay-as-you-go setup too (together with Global Reader for read-only access).
• Global Reader: Read-only access to Copilot settings only.
• Global Admin: Only in an emergency, never as the default.

Microsoft Agent 365 as the control plane: Cross-agent governance (whether Agent Builder, Copilot Studio, Power Platform, or partner agents) has run centrally through Microsoft Agent 365 since May 2026. Licensed through the new foundation M365 E7 + Agent 365 (GA May 1, 2026).

19.3 Copilot controls: the three pillars

Name change: What Microsoft called the Copilot Control System until summer 2026 is now simply Copilot controls in the documentation. The old documentation links under /copilot/copilot-control-system/ redirect to /copilot/copilot-controls/. Nothing changes about the three pillars themselves, only the headings above them. If your internal concepts or training materials use the old name, you can keep it, but be aware that Microsoft search results now carry a different name.

19.4 SSO and identity

Microsoft 365 Copilot uses Microsoft Entra ID (formerly Azure AD). SSO is the default, there is no separate login. SCIM provisioning for the user lifecycle is standard, group membership controls license assignment. Conditional Access and MFA are honored.

19.5 Foundational Deployment Blueprint

Microsoft has formalized a binding minimum standard ahead of a broad rollout: the Foundational Deployment Blueprint with three pillars.

1. Remediate Oversharing: Identify top sites using permissions reports, set interim restrictions via Restricted Access Control or Restricted Content Discovery, then fix them permanently.
2. Set up Guardrails: Sensitivity labels, DLP for Copilot, Restricted Content Discovery where needed. (Restricted SharePoint Search is being retired, new activations are blocked from July 31, 2026. More in Chapter 20.4.)
3. Meet Regulations: Audit logs, eDiscovery, EU AI Act Article 4 training records, Compliance Manager.

Before the rollout, Microsoft recommends the M365 Copilot Optimization Assessment, which evaluates data governance maturity and security controls.

19.6 Rollout strategy

1. Setup requirements: Update channel set to Current or Monthly Enterprise (Semi-Annual is not supported), MFA for all users, EEEU disabled at tenant level, `*.cloud.microsoft` in proxy allowlists (domain consolidation). Clarified in September 2026: Microsoft only supports allowing the entire domain, not individual URLs beneath it. *.office.com, *.cloud.microsoft, and copilot.cloud.microsoft require uninterrupted WebSocket connections (WSS); TLS inspection and aggressive proxy timeouts break Copilot integrations. The Copilot app has moved from m365.cloud.microsoft to copilot.cloud.microsoft. According to MC1462915 (as of October 8), Microsoft has been redirecting since early September wherever copilot.cloud.microsoft is reachable, and the remaining users follow in early November 2026. You can test this via connectivity.m365.cloud.microsoft/copilot. If you block copilot.cloud.microsoft to keep out personal accounts, use Tenant Restrictions instead. In addition, the "Office Feature Updates" scheduled task must run and be able to reach the network, otherwise core features of Copilot in Word, Excel, PowerPoint, and OneNote are missing.
2. Pilot group (10-50 users): Power users from various departments, identified through existing M365 usage metrics.
3. Enablement training: Before Copilot is rolled out (see Microsoft Copilot Academy and the MS-4007 certification).
4. Wave 1 (~20 percent): Usually Marketing and Sales first, then Operations.
5. Wave 2 (full): Only after 4-6 weeks of experience with Wave 1.

19.7 Adoption Hub redesign (May 18, 2026)

Microsoft has completely reworked the M365 Copilot Adoption Hub. New persona structure: Business User, Champions/Adoption Manager, Leader. Content is pre-sorted by role instead of by feature. Recommended for DECAID Academy customers as an entry point before their own enablement campaign.

19.8 Organizational Messages for adoption (since June 2, 2026)

Through the Microsoft 365 Admin Center, admins can deliver targeted adoption messages to users, now with two extensions:

• Usage-based targeting: In addition to group-based targeting, messages can be tailored to actual usage behavior. First action segments: inactive Copilot users (28 days) and inactive Copilot users in Teams (30 days).
• Email delivery: Organizational Messages can now be delivered by email too, with 9 ready-made templates in 15 languages for onboarding and adoption.
• Hybrid-joined devices (since August 25, 2026): Organizational Messages now reach devices that are hybrid-joined to Microsoft Entra as well. Previously they only went to purely Entra-joined or purely on-premises-joined devices. For the DACH mid-market this is the most relevant gap being closed, because hybrid domain joins are the rule there, not the exception. If you have seen adoption campaigns fail on poor delivery rates so far, measure the targeting again.

19.9 New admin controls (since July 2026)

• Watermarks for AI-generated content: The Cloud Policy Service policy "Include a watermark when content from Microsoft 365 is generated or altered by AI" lets you apply a visible or audible watermark to video and audio content generated or altered by AI. The default is no watermark (Disabled/Not configured). The policy does not apply to images, where users enable watermarks themselves at myaccount.microsoft.com.
• Copilot Analytics "All" user page: The adoption page in the Copilot Dashboard now shows Copilot usage in a unified view with a license filter for All, M365 Copilot (licensed), and Copilot Chat (unlicensed).
• Anthropic models for non-federal GCC customers (since July 22, 2026): In the Admin Center under Copilot, Settings, View all, "AI providers operating as Microsoft subprocessors" there is a dedicated setting that lets non-federal GCC customers enable Anthropic models. It is off by default and requires acceptance of the terms, because the data is processed outside the FedRAMP-authorized US Government cloud. For federal GCC customers, GCC High, and DoD the option stays off.
• Web search policy now has three levels (since August 18, 2026): The Cloud Policy "Allow web search in Copilot" no longer knows just on and off, but three options: enabled in Microsoft Copilot and Copilot Chat, disabled in both, or disabled in work mode and enabled in web mode as well as in Copilot Chat. The third option is the interesting case and has a side effect you need to know: it turns off web search in Researcher and in Copilot Cowork as well. If the policy is not configured at all, web search is active, unless "Allow the use of additional optional connected experiences in Office" is set to Disabled. For GCC and DoD it is the other way around: web search is off by default and stays off as long as the policy is not set. On the user side there is the Web content switch under Settings, Personalization, Advanced, which now applies to Microsoft Copilot and Copilot Chat alike and is saved across devices.
• Web search queries become visible and auditable (since August 18, 2026): Users see in the sources area the search queries Copilot actually sent to Bing, but only in Copilot Chat and not in the Copilot pane of Word or PowerPoint, and only for 24 hours in the chat history. For admins the second part matters more: these generated search queries can be evaluated via Search, Audit, and eDiscovery, and in the Purview Activity Explorer the specific search terms appear next to prompt, response, and sources, filterable via Web queries. For the first time this makes it provable which content left an organization for web search, and in works council (Betriebsrat) and data protection discussions that is an argument that has been missing until now.
• Fabric data in Microsoft 365 Copilot: Controls whether Copilot may ground responses on Power BI reports and semantic models. The switch sits under Copilot, Settings, View all and has three levels: No users, All users, or specific groups. For Fabric content to actually be indexed and discoverable, a Fabric administrator additionally has to enable the tenant setting "Share Fabric data with your Microsoft 365 services" in the Fabric Admin Portal. Details and the data protection implications in Chapter 6.4.

19.10 Domain Exclusion: available again since September 9, 2026

This feature has a history. In mid-July 2026 Microsoft rolled out Domain Exclusion, withdrew it again without explanation in early August 2026, and on September 9, 2026 rolled it out once more and declared it available. If you removed the feature from a governance concept in recent weeks, you can put it back in now.

What it does: Admins name external domains that Copilot is not allowed to use for web grounding in Microsoft 365 Copilot and Copilot Chat, up to 1,000 domains. The feature is not active by default and must be configured through a PowerShell script provided by Microsoft, there is no interface in the Admin Center. Script and documentation are available at aka.ms/Copilot/DomainExclusionScript and aka.ms/copilot/DomainExclusion, and Search Administrator or Global Administrator rights are required.

19.11 Agent governance in the Admin Center (since August and September 2026)

Between August 20 and September 3, 2026, Microsoft expanded agent management in the Microsoft 365 Admin Center into a dedicated area. This is the most important structural change on the admin side this quarter, because it closes a gap: until then, agents were created in many places without anyone having an overall view.

• Agents, Overview: Landing page with the metrics Agent Registry, active users, agent runtime over the last 30 days, and Registry Sync. Plus cards for open agent requests, agents with risks, agents without an owner, and agents with exceptions. It captures agents from Copilot Studio, SharePoint, Agent Builder, Foundry, the Agents Toolkit, and platforms outside Microsoft.
• Agents, Registry: Complete list with filters by status, publisher, channel, platform, and data source. A Risks column bundles findings from Entra, Defender, and Purview, including agents without an owner, excessive permissions, security misconfigurations, suspected prompt injection, and access to sensitive data. The display lags the security portals by up to one hour. Export to Excel with more than 30 fields per agent.
• Agents, Settings (since September 3, 2026): This is where the actual levers sit. Agent management rules allow bulk actions, such as installing Microsoft agents tenant-wide, automatically assigning orphaned agents to the former owner's manager, blocking unused orphaned agents, applying a security template retroactively to existing agents, or automatically rejecting publishing requests after a defined number of days. In addition: Allowed agent types (Microsoft, your own organization, external providers), security and policy templates, sharing, user access, feedback sharing, and tags, up to 50 per organization.

License context: The agent governance features depend on Microsoft Agent 365. It is part of Microsoft 365 E7 (E5 plus Microsoft Copilot plus Agent 365 plus Entra Suite) or can be licensed separately. The metrics for active users and agent runtime only start filling up after Agent 365 licenses have been assigned, and initially show fewer than 30 days.

19.12 Controlling app and agent installation centrally (since August 2026)

A small change with a big everyday impact: app and agent installation settings are now set once and enforced consistently across Teams, Outlook, and Microsoft Copilot. Previously, changes in the Microsoft 365 Admin Center only applied to Outlook and Microsoft 365, while changes in the Teams Admin Center only took effect in Teams. That was one of the most common reasons an agent was visible in one place after rollout and not in another. If you have treated such cases as bugs so far, re-check the affected settings once.

19.13 Measuring impact: "Cowork assisted hours" (since September 9, 2026)

The Consumption Dashboard has a new metric that tries to infer value from pure usage. The methodology is worth knowing because you will have to explain it in customer conversations: activity is grouped by recognizable intent into distinct tasks, a classification model assigns each task to one of eight work types (analysis and research, document and content creation, email workflows, meeting workflows, communication workflows, specialized workflows, writing or debugging code, general assistance), and from that the time typically given back is estimated.

19.14 New in the Admin Center (September 2026)

• Blocking Copilot Chat selectively: Admins can block Copilot Chat for everyone or for specific people and groups, explicitly including licensed users. Blocked users see a message in the product. Via "Custom link for blocked Microsoft Copilot app" under Copilot, Settings, you can add a link to your internal policy there instead of leaving people alone with a bare block message.
• License requests page: Under "License Requests", all Copilot license requests come together centrally, with sorting, filters, and bulk actions (Roadmap ID 561206).
• Permanently deleting People Skills: A new admin setting under People Skills permanently deletes the skills library along with user data. The data disappears from profiles, Copilot, and Viva (Roadmap ID 565905). For DACH organizations where the works council did not support People Skills, this is the clean way back.
• Advanced package uploads: Controls who may upload agent packages with actions or MCP servers (everyone, no one, specific people or groups). Simple packages that contain only instructions remain allowed.
• Authoritative Sources in the UI: Up to 100 SharePoint sites can now be designated as an authoritative source for Copilot Search in the Microsoft 365 Admin Center (see Chapter 20.3).
• Copilot Dashboard: Targeted Pulse surveys, a power user report, and a daily updated Power BI report on usage. The metrics "Copilot Chat (work)" and "Copilot Chat (web)" have been merged into a single "Copilot Chat" metric, and the old web metric is being phased out as "legacy". If you report time series from the dashboard, mark the break. Clarified at the end of September: power users are people with at least 15 Copilot actions per week in at least 9 of the last 12 weeks. Below 50 Copilot licenses, the Agent Dashboard, benchmarks, Pulse data, weekly and monthly trends, and manager delegation are missing. Since October 6, there have been Cowork metrics in the Copilot and Consumption dashboards, including export and new queries in Advanced Insights (Roadmap ID 567005).
• Third-party agents in the Teams Admin Center: Agents such as GitHub Copilot or Atlassian Rovo can be managed there; admin preview since September, GA announced for October 2026.

19.15 New in the Admin Center (October 2026)

• App Builder Agent is being retired (MC1505609): From mid-October 2026, no new apps can be created, and on November 30, 2026, the App Builder Agent and vibe.powerapps.com will be shut down. The replacements are Apps in Copilot Cowork and Apps in Copilot Studio (Chapter 16.7), and an in-product migration has been announced for mid-October.
• Controlling browser use in Cowork (MC1474461): A dedicated switch determines whether Cowork may use a browser, for no one, everyone, or specific groups. Off by default.
• Pinning the Copilot app to the taskbar (MC1481310): Under Copilot, Settings, for selected groups, only on Intune-managed devices with the app installed.
• Company logo in the Copilot app (MC1238432): A footer with logo and the labels "Approved by", "Provided by", or "Managed by", off by default. A small but effective signal against shadow AI, because users can see which tool is officially approved.
• Agent Registry without duplicates (MC1477184): Duplicate entries are merged and shown with version history, which changes the agent counts. That the same Copilot Studio agent shows up once as "Shared by creator" and once as "Published by your organization" is intended according to the documentation and not an error.
• Agent 365 beyond Microsoft (MC1480873, MC1506727): Agent 365 will also monitor third-party agents such as Bedrock, Vertex, and Claude, with public preview at the end of October and GA at the end of November. From the end of November, monitoring Microsoft agents no longer requires an Agent 365 license.
• Guided Copilot onboarding (MC1486291, rollout late October to early November): Activated by admins, with a link to the internal AI usage policy, an onboarding link or email template, and built-in notifications. Completions can be evaluated via Viva Learning (see Chapter 21.2).

Microsoft 365 Copilot is built for enterprise compliance out of the box. If you are on Microsoft 365, you already have the important levers, but they have to be switched on deliberately. Three major updates in 2025/2026: SharePoint Advanced Management (SAM) has been included in the Copilot license since early 2025, DSPM for AI in Purview is GA, and Insider Risk Management has its own "Risky AI usage" policy template.

20.1 Certifications and Frameworks

• SOC 1, SOC 2 Type II
• ISO 27001, ISO 27017, ISO 27018
• ISO 42001 (AI Management Systems, new)
• FedRAMP High
• HIPAA-compliant configuration on request (Enterprise)
• GDPR-compliant Data Processing Addendum (standard in M365)
• EU AI Act Art. 4-compliant documentation (see Chapter 21)
• Exception for OpenAI models: For models operated by OpenAI, OpenAI's own certifications apply instead of Microsoft's, and FedRAMP High is not among them.

20.2 EU Data Boundary

Microsoft 365 Copilot stores and processes EU workspace data in EU data centers. This is the default for M365 tenants with an EU address.

20.3 SharePoint Advanced Management (SAM)

Included in the M365 Copilot license since early 2025. A central pillar of the Copilot data foundation:

• Content Management Assessment Hub: Finds overshared sites, ownerless/inactive sites, EEEU usage. Can be re-run every 30 days.
• Site Lifecycle Management: Site ownership policies, inactive site policies, site attestation policies (the owner has to confirm the site).
• Data Access Governance Reports: Site permissions, EEEU report (top 100 sites with org-wide sharing), sharing links activity. Since October 6, 2026, a detailed report shows the permissions for Everyone and EEEU at item level (Advanced Management, All features, Data access governance reports, Roadmap ID 561038).
• Site Access Reviews and Microsoft 365 Archive: The revised foundation documentation (as of October 6, 2026) names Site Access Reviews down to the file level and Microsoft 365 Archive to take legacy content out of Copilot's reach. Basic Purview capabilities are available from E3, the "optimized" variant from E5 or E7.
• Restricted Access Control (RAC): Site access only for a defined Entra group, blocked even if a permission existed before.
• Restricted Content Discovery (RCD): Hides sites from Copilot and org-wide search without changing permissions.
• AI Insights: LLM-based interpretation of the reports with action recommendations (since late 2025).
• Authoritative Sites (since August 11, 2026): Admins mark individual SharePoint sites as "authoritative". Copilot Search then treats their content as a trusted source and prioritizes it, typically for company news, policies, and official templates. Users see it via the label "From your organization".

20.4 Restricted SharePoint Search (RSS)

An emergency brake, not scalable. Allowed list with a hard limit of 100 sites. Microsoft recommends migrating to SAM and then deactivating it. Activation only via PowerShell, takes effect within an hour. Affects Modern Search, Copilot Chat, and agentic experiences.

Important for expectation management: RSS is not a security boundary and does not change any permissions. Even with RSS active, users still see content they own, have recently opened, or that was shared with them directly. RSS affects the entire enterprise search as well, not just Copilot.

20.5 Microsoft Purview

• Sensitivity Labels: Copilot respects encryption as well as EXTRACT and VIEW usage rights. Prerequisite: sensitivity labels enabled for SharePoint/OneDrive. New (since July 1, 2026): Files generated by Copilot automatically inherit the highest sensitivity label from the referenced source data. If Copilot cannot apply a label, users get a clear message to set the missing label before sharing or saving.
• DLP for Copilot & Agents: Excludes files with specific labels from grounding, and can block prompts with sensitive keywords or SITs. Optional: allow sensitive data for Work IQ but block it from web grounding.
• DSPM for AI (GA): Three AI app categories ("Copilot experiences and agents", "Enterprise AI apps", "Other AI apps" incl. ChatGPT/Gemini/DeepSeek). Risk assessments, Activity Explorer for prompts/responses, one-click policies. Update May 2026: New surfaces in the catalog: Microsoft Facilitator (Teams), Channel Agent in Teams, Microsoft Foundry (renamed from Azure AI Foundry), Anthropic Claude (Enterprise), and Microsoft Agent 365. Web search query logging is now visible in the Activity Explorer next to prompt/response.
• DLP now also applies to Cowork (GA mid to late October 2026, MC1477182): Grounding block via sensitivity label, prompt block via sensitive information type, and web search block via SIT. Existing Copilot policies apply automatically, but only to the prompt text, not to uploaded files. Since late September, you can point the link behind "Learn about access restrictions" in DLP notices to your own policy page (MC1478467).
• Endpoint DLP: Can warn about or block pasting into third-party AI sites (e.g. ChatGPT in the browser).
• Audit logs: Every Copilot interaction with Type=Copilot activity, incl. prompts, responses, and referenced files with labels.
• eDiscovery: Copilot activities searchable via Type=Copilot activity. Prompts are stored in the user's mailbox.
• Communication Compliance & Data Lifecycle Management: With AI policy templates and retention/deletion for Copilot interactions.

DSPM generation change, important for terminology: Purview now runs three variants side by side. Data Security Posture Management (DSPM) is the current version, and only this one gets new features. On status: the Learn documentation has listed it as the "current version" since May 2026, while the roadmap (RM561036, as of October 8) now gives January 2027 as GA for the new DSPM experience, including signals from BigID, Cyera, OneTrust, and Varonis and a bulk action against overshared SharePoint links. DSPM for AI (classic) no longer receives improvements and does not support Agent 365. Alongside it there is still DSPM (classic). If you write "DSPM for AI" in concepts, you now usually mean the old variant. The current DSPM comes with its own areas, including Posture, Objectives with predefined data security goals, AI observability, and Asset Explorer.

20.6 Insider Risk Management: "Risky AI usage"

New policy template (2026) detects prompt injection and access to protected materials. Signals flow into Defender XDR. Adaptive Protection automatically moves high-risk users into more restrictive policies.

20.7 Training Opt-Out, Workplace Harms Filter, Customer Copyright Commitment

• Training opt-out: Contractually excluded in M365 Copilot. Default. Also applies to Anthropic outputs under the Microsoft Product Terms.
• Workplace harms filter: No AI-based assessment of employee performance, attitude, or emotion.
• Customer Copyright Commitment (CCC): Microsoft indemnifies Copilot outputs (incl. Anthropic outputs) in copyright lawsuits.
• Azure OpenAI Abuse Monitoring: Disabled for M365 Copilot, no human review.

If you use Microsoft 365 Copilot in DACH, you have six additional obligations and options that often get lost in the global documentation. Most important update for 2026: the Anthropic subprocessor enablement is default OFF in the EU/EFTA/UK.

21.1 Anthropic as a Microsoft Subprocessor (since January 7, 2026)

• Timeline: December 8, 2025: admin toggle appears in the Microsoft 365 Admin Center; January 7, 2026: Anthropic active as a subprocessor; April 3, 2026: separate setting "Copilot in M365 apps with Anthropic models" for EU/EFTA/UK, which makes Anthropic the default model for Copilot in the M365 apps after the opt-in; end of March 2026: full rollout.
• EU/EFTA/UK: Default OFF. An AI Administrator or Global Admin has to opt in explicitly, even if the legacy toggle was set before.
• Outside the EU/EFTA/UK (Commercial Cloud): Default ON, admins can disable it.
• GCC (non-federal): Since July 22, 2026 it can be enabled via an admin setting, off by default, with mandatory acceptance of the terms, because processing runs outside the FedRAMP-authorized US Government cloud. Federal GCC, GCC High, DoD, and sovereign clouds: still not available; the option does not even appear in the Microsoft 365 Admin Center there.
• Important: Anthropic models run outside the EU Data Boundary and outside the in-country LLM processing commitments. Contractually, the Microsoft Product Terms, DPA, Enterprise Data Protection, and Customer Copyright Commitment continue to apply.
• Granular assignment: Possible per user or per Entra security group.
• Admin path: Microsoft 365 Admin Center, Copilot, Settings, View all, "AI providers operating as Microsoft subprocessors", Anthropic.
• Cowork special case: For Copilot Cowork, the Anthropic model family can only be switched off tenant-wide; there is no way to release it for individual groups there. Access to Cowork itself is unaffected; the "Auto" mode then chooses from the remaining models.
• Historical, but still relevant: The earlier setting "Anthropic independent processor" was switched off on May 1, 2026. Anyone in the EU, EFTA, or UK who had consented back then under Anthropic's own terms has to opt in again; otherwise the switch stays off.

21.2 EU AI Act Article 4 (since February 2, 2025)

• Proof of training is mandatory for everyone using Copilot.
• Microsoft Workspace Analytics and the Copilot Dashboard in Viva Insights provide hour and activity logs to support the proof of training.
• In the event of audits by authorities, the logs must be available.
• The guided in-product onboarding (Chapter 19.15) records completions via Viva Learning and can therefore serve as an additional building block for the proof.

21.3 GDPR and Copilot

• Data Processing Addendum: Standard in M365 contracts (Business and above).
• Personal data: Processed within the tenant; EU Data Boundary active for prompts, responses, and Graph data.
• Right to be forgotten: Via the workspace admin or Microsoft Compliance Manager.
• DPIA: Mandatory for use cases involving critical data.

21.4 EU Data Boundary in Practice

Active by default for EU tenants. Data stays in the EU. But: Bing web queries and Anthropic models explicitly run outside the EUDB. If you have to be maximally restrictive, disable web search in Copilot (via the Cloud Policy Service, "Allow web search in Copilot") and leave Anthropic OFF.

Web vs. Work mode (since August 18, 2026, see Chapter 19.9): The "Allow web search in Copilot" policy has a new default mode that can disable web search in Copilot Work mode and enable it in Copilot Web mode plus Copilot Chat. This lets you run confidential Work mode requests without Bing grounding while users in Copilot Chat remain web-search-capable. The third option turns off web search in Researcher and Cowork as well. Researcher also has its own web search switch in the input field; Analyst and Cowork do not.

Local inferencing (GA announced for December 2026, RM571886): Microsoft plans to run inference for supported Copilot interactions within the respective geography. For data residency discussions, this is the next important date. Exactly which interactions are covered is still open, so check this before you rely on it in a DPIA.

21.5 EU AI Act Art. 5 (Prohibited AI Practices)

Even though Copilot is "general-purpose AI": there are certain use cases you must not implement with it. Social scoring, manipulation, predictive policing. If you use Copilot in HR, be especially careful with employee monitoring use cases. The built-in workplace harms filter does block AI assessments of performance, attitude, or emotion, but the obligation to define use cases cleanly lies with the deployer.

21.6 What DACH Compliance Should Check

1. License: M365 Copilot, not consumer Copilot, for business data.
2. SSO and SCIM: Entra ID provisioning active.
3. EU Data Boundary: Check the status, confirm it in the Trust Center.
4. Anthropic subprocessor: Make a deliberate decision on whether to opt in. Default is OFF in the EU/EFTA/UK.
5. OpenAI subprocessor: On by default since July 24, 2026. Confirm it deliberately or set it to "No users".
6. Bing web search: Set the web search policy deliberately ("Enabled everywhere", "Disabled everywhere", "Disabled in Work / Enabled in Web").
7. Proof of training: Who completed Copilot training and when. EU AI Act Art. 4.
8. Memory policy: Active or disabled tenant-wide.
9. Sensitivity labels: Configured in Purview for sensitive data.
10. Audit log review: Who reviews monthly, who responds to anomalies.