What Is a Copilot? Microsoft's Term Explained for Business Leaders

Microsoft Copilot (no additional adjective) refers to the AI assistant available at copilot.microsoft.com and integrated into Windows 11 and the Edge browser. This is Microsoft's consumer-facing AI product, powered by OpenAI's GPT-4 model and Bing search.

Free Copilot is general-purpose: it can answer questions, draft text, summarise web content, and generate images. It does not have access to your Microsoft 365 data (your emails, documents, calendar). It is a good entry point for employees to develop AI intuition but it is not the enterprise AI product.

Microsoft 365 Copilot (sometimes written as M365 Copilot) is the enterprise AI product that is integrated into the Microsoft 365 productivity suite: Word, Excel, PowerPoint, Teams, Outlook, and OneNote. This is the product that most organisations are purchasing when they talk about 'deploying Copilot'.

Microsoft 365 Copilot is grounded in your organisation's Microsoft 365 data. It can summarise your email threads, draft documents based on your existing files, generate meeting recaps from Teams meetings, and answer questions about your organisation's content, subject to your security and permission controls.

This product requires a separate licence (currently around £30 per user per month in addition to existing Microsoft 365 licences) and requires Microsoft 365 E3 or E5 as a prerequisite.

Copilot Studio is Microsoft's low-code platform for building custom AI assistants and agents. Rather than using a pre-built Copilot, organisations use Copilot Studio to create their own AI assistants configured for specific workflows, connected to specific data sources, and embedded in specific applications.

For example, an organisation might use Copilot Studio to build a customer service AI assistant grounded in their product documentation, or an HR assistant that answers employee questions based on HR policies, or a sales assistant connected to CRM data.

Copilot Studio requires different skills to deploy than Microsoft 365 Copilot and is more appropriate for organisations with specific, well-defined AI assistant requirements than for general workforce AI adoption.

The distinction between these Copilot products matters for procurement, licensing, and capability expectations. An organisation that purchases Microsoft 365 Copilot licences expecting enterprise AI capability for their entire workforce has made a sound decision. An organisation that deploys free Copilot expecting the same capability will be disappointed.

It also matters for governance. Microsoft 365 Copilot has specific data governance implications (access to your Microsoft 365 data, subject to your permissions configuration) that free Copilot does not. Understanding which Copilot product is in use in which context is part of AI governance.