4.2 Microsoft 365 Copilot and Copilot Chat

Quick Answer: Microsoft 365 Copilot Chat is included with Microsoft 365, grounded in the web, and protected by enterprise data protection for work or school accounts. It is not grounded in Microsoft Graph work data by default and does not need the paid add-on. Microsoft 365 Copilot is the add-on license that grounds answers in Graph work data and the web and puts Copilot inside Word, Excel, PowerPoint, Outlook, and Teams. Microsoft Copilot at the consumer site is a personal product. Do not invent a price — Microsoft does not publish one on the pages this section uses.

The April 30, 2025 MS-900 outline has two Copilot bullets: productivity benefits and collaboration benefits of Microsoft 365 Copilot and Microsoft 365 Copilot Chat. They are the same products taught from two angles. Learn them as a pair, then keep the consumer product off the work tenant.

Three products, three jobs — do not conflate them

Microsoft publishes a "which Copilot" decision page for a reason. The brand word Copilot now covers several assistants.

Microsoft 365 Copilot Chat is an AI prompt-and-response experience powered by large language models (LLMs) and grounded in the web. Official FAQ language: it is automatically included for organizations that have a Microsoft 365 subscription. Users sign in with a Microsoft Entra work or school account. They can use it at https://m365copilot.com, in the Microsoft 365 Copilot app, and in Teams, Outlook, and Microsoft Edge. Features Microsoft documents for Chat include Copilot Pages, file upload, image generation, previous chats, and agents. Chat experiences inside Word, Excel, and PowerPoint still vary by tenant configuration and license.

Enterprise data protection (EDP) applies to Copilot Chat prompts and responses for Entra-signed-in users at no extra cost. Official privacy pages say prompts and responses are processed inside the Microsoft 365 service boundary, can be logged for audit and eDiscovery (controls depend on the underlying plan), and are not used to train foundation models. A green shield in the Chat UI is the visual cue that EDP is on. EDP is not the same thing as Graph grounding. Protection of the chat is not permission to read the whole tenant.

Microsoft 365 Copilot (the add-on) is licensed by the work organization. Official overview language: it uses organizational data and the web, and it requires an add-on license. It pairs with everyday Microsoft 365 apps, uses Microsoft Graph to personalize responses from the user's emails, chats, documents, and meetings, and only shows data that user already has permission to access. Licensed users can turn Work IQ on for a work-based Graph chat, or off to include internet results as well.

Microsoft Copilot is the free consumer assistant at https://copilot.microsoft.com. Official guidance: use it for personal tasks; never add sensitive or proprietary work information to a personal prompt. If a work device offers a work-or-personal choice, work redirects toward the Microsoft 365 experience; personal stays on the consumer path.

This exam is not Microsoft Security Copilot (security operations) or GitHub Copilot (code). Those are different products.

What Copilot Chat can and cannot see

Official privacy documentation is blunt: unlike Microsoft 365 Copilot, Copilot Chat is not grounded in organizational content like files, emails, or chats as part of the default chat experience — it is grounded in data from the web only.

If a user without the add-on wants work content in the answer, Microsoft documents a short list of explicit paths — not silent Graph search:

• Put the content in the prompt (paste, upload, drag-and-drop, or pick a file with /).
• Use Copilot Chat in Outlook, which can reason over that user's mail, calendar, meetings, chats, and a limited set of files (OneDrive, frequently visited SharePoint, files shared with them, files they viewed, edited, or created). Full Work IQ / semantic indexing of work data remains an add-on capability.
• Use a pay-as-you-go agent that an admin has grounded on specific SharePoint or connector content.
• In select open-content scenarios (for example a Word/Excel/PowerPoint agent on the file that is open, or Copilot Chat in Edge on an allowed page).

The FAQ states the exam sentence almost verbatim: if a user does not have a Microsoft 365 Copilot license, Copilot Chat cannot access the user's shared enterprise data, individual data, or external data indexed via Microsoft Graph connectors — unless one of those explicit paths is used.

Web grounding sends short generated search queries to Bing. Those queries are not the full prompt, do not include user or tenant identifiers, and are not the entire uploaded file. Prompts and responses stay under EDP; Bing queries follow a different connected-experience path. You do not need that legal split for every item, but you should not claim "Chat never talks to the internet" or "Chat already sees every SharePoint site."

Do not invent a dollar price for the add-on or for metered agents. Official pages describe Chat as included and the work Copilot as an add-on; they do not publish a list price on the pages this section uses. If a question asks for a number, the honest answer is that the price is not published here.

Productivity benefits: draft, summarize, analyze, create

The first official bullet is productivity. Microsoft 365 Copilot sits inside the app where the work already is so the user does not copy a document into a separate chatbot.

Official in-app examples you should be able to recognize:

Microsoft 365 Copilot Chat covers the same kinds of productivity work when the source is the web, an uploaded file, or another explicit attachment: rewrite a public article into talking points, summarize a PDF the user dropped in, generate an image, or park the result on a Copilot Page. Chat is the right answer when the company has not bought the add-on and the user needs a protected work chat. It is the wrong answer when the stem requires Copilot to already know last Tuesday's email, the Teams channel, or the SharePoint policy library without the user attaching anything.

Productivity verbs to circle on the exam: draft, summarize, analyze, create, rewrite, suggest formulas, build a deck, catch up on a document.

Collaboration benefits: meetings, chats, and shared files

The second official bullet is collaboration. This is where the add-on earns its keep, because collaboration artifacts live in Graph: Teams meetings, chats, shared files, and mail.

Official Teams capabilities for licensed Microsoft 365 Copilot:

• Meetings. Users can invoke Copilot during a meeting or call in the same tenant. Copilot uses the transcript in real time to answer questions about this conversation. After the meeting, users can still ask for a recap, decisions, and owners. That is the "I missed the call — catch me up" scenario.
• Chat. Copilot can summarize recent chat content in that thread (officially up to 30 days before the last message) and cite the source messages. It does not silently pull other chats, emails, or files into that side panel.
• Calls. Copilot can capture key points, owners, and next steps on supported VoIP and PSTN calls.

Across Microsoft 365, collaboration prompts look like:

• "Summarize the shared strategy deck in SharePoint and list open questions."
• "What did we decide in yesterday's design review, and who owns the follow-ups?"
• "Catch me up on the #launch channel since Monday."
• "Turn this Word brief into a PowerPoint the whole account team can edit."

Copilot Chat can still help a team collaborate — for example, two people upload the same PDF and compare talking points, or they edit a Copilot Page together — but it does not, by default, recap a Teams meeting it has never been allowed to read. Meeting recap and Graph-wide "what did my team decide?" items point to Microsoft 365 Copilot, not Chat-alone and not personal Microsoft Copilot.

Copilot respects existing permissions. If a user cannot open a file in SharePoint, Copilot must not summarize that file for them. Oversharing in SharePoint becomes an AI problem; Microsoft documents SharePoint Advanced Management and Restricted SharePoint Search as ways admins shrink Copilot's reachable junk. You do not need those admin products for every item, but you should reject the myth that Copilot bypasses permissions.

Scenario mapping

• "We have Microsoft 365. We want a protected AI chat for research on the public web. We have not bought an add-on." → Microsoft 365 Copilot Chat
• "Draft this job description from the open Word doc, then make Level 1 / Level 2 variants." → Microsoft 365 Copilot in Word (add-on / in-app)
• "Suggest a chart and call out the outlier rows in this workbook." → Copilot in Excel
• "I missed the 45-minute Teams meeting — recap decisions from the transcript." → Copilot in Teams meetings (add-on collaboration)
• "Summarize this email thread and propose a reply in our usual tone." → Copilot in Outlook
• "A user pasted confidential strategy into copilot.microsoft.com on a personal account." → that is personal Microsoft Copilot, the wrong product for work data

Exam traps

• Chat is not the add-on. Included + web-grounded + EDP ≠ Graph-grounded work Copilot.
• EDP is not Graph access. Protected prompts are not a license to read the tenant.
• Personal Microsoft Copilot is not Microsoft 365 Copilot. Different product, different account, different data boundary.
• In-app Copilot in Word/Excel/PowerPoint/Outlook/Teams is the add-on story. Chat can appear in some app shells depending on tenant setup; do not assume every Copilot button means Graph search.
• Do not invent model names or prices. Say LLM and add-on license. If a price is not on the official page, it is not published here.
• Collaboration items cite meetings, chats, and shared files. Productivity items cite draft / summarize / analyze / create. Both bullets are in scope for this section.