December 17, 2025
December 17, 2025
Copilot Chat vs Microsoft 365 Copilot: What’s Free, What’s Paid and What the Difference Really Is
Microsoft now offers two Copilot experiences inside Microsoft 365, which has caused understandable confusion for many businesses:
- Copilot Chat, which is available at no additional cost in many Microsoft 365 subscriptions
- Microsoft 365 Copilot, which is a paid add-on licence with deeper integration
While they share a name and a similar interface, they are designed for very different levels of capability.
This article explains what each one can do, what they can access, and which businesses actually benefit from the paid version.
What Is Copilot Chat (Included with Microsoft 365)?
Copilot Chat is the entry-level Copilot experience available to users signed into Microsoft 365 with a work or school account.
It provides a secure, business-grade AI chat interface that can help with general work tasks but has limited access to your organisation’s data.
What Copilot Chat Can Do
Copilot Chat can:
- Answer general business questions
- Draft emails, documents and summaries from prompts you type
- Rewrite or improve text for clarity or tone
- Explain concepts, spreadsheets or formulas you paste in
- Help with brainstorming, planning and outlining
It operates mainly on the information you explicitly provide in the chat, rather than automatically pulling from your Microsoft 365 data.
What Copilot Chat Cannot Do
Copilot Chat cannot:
- Automatically read your emails, calendar or Teams chats
- Analyse files stored in SharePoint or OneDrive unless you paste content in
- Summarise meetings or conversations you did not explicitly provide
- Create content based on your organisation’s internal data by default
In short, Copilot Chat behaves like a secure, business version of an AI assistant, but without deep awareness of your Microsoft 365 environment.
What Copilot Chat Has Access To
Copilot Chat has access to:
- General knowledge and reasoning
- Information you manually enter into the chat
- Your identity and permissions for security and compliance
It does not have ongoing access to your tenant data unless you provide it.
What Is Microsoft 365 Copilot (Paid Add-On)?
Microsoft 365 Copilot is a paid licence that unlocks deep integration across Microsoft 365 apps and your organisation’s data.
This is where Copilot becomes a true productivity assistant rather than just a chat tool.
What Microsoft 365 Copilot Can Do
Microsoft 365 Copilot can:
- Draft emails based on recent Outlook conversations
- Summarise long email threads automatically
- Create Word documents using content from SharePoint
- Analyse Excel spreadsheets and generate insights
- Summarise Teams meetings, chats and action items
- Create PowerPoint presentations from documents or prompts
- Answer questions like “What did we decide last week?” or “Summarise this project?”
It works inside the apps your staff already use, not just in a standalone chat window.
What Microsoft 365 Copilot Has Access To
Microsoft 365 Copilot can access:
- Outlook emails and calendars
- Teams chats, meetings and recordings
- Word, Excel and PowerPoint files
- SharePoint and OneDrive content
- Microsoft Graph signals such as relationships, activity and context
Importantly, it still respects existing permissions. Copilot cannot see anything the user cannot already access.
What Microsoft 365 Copilot Cannot Do
Microsoft 365 Copilot does not:
- Override security or permissions
- Access data across tenants
- Make decisions without user review
- Replace compliance, governance or data hygiene
If your Microsoft 365 environment is disorganised, Copilot will surface that disorganisation faster.
Side-by-Side Comparison
| Feature | Copilot Chat (Free in Microsoft 365) | Microsoft 365 Copilot (Paid Add-On) |
|---|---|---|
| Licensing | Included with many Microsoft 365 licences | Additional per-user licence |
| How it works | Secure AI chat experience | Embedded directly into Microsoft 365 apps |
| Data access | Uses only information you manually provide | Uses your organisation’s data and context |
| Email access | No automatic access to Outlook emails | Accesses emails based on user permissions |
| File access | No automatic access to files | Accesses files in SharePoint and OneDrive |
| Meetings and chats | No access to Teams meetings or chats | Accesses Teams meetings, chats and summaries |
| Security model | Permission-aware, tenant-isolated | Permission-aware, tenant-isolated |
| Best suited for | Drafting, rewriting and general assistance | Time savings, insights and workflow acceleration |
Which One Is Right for Your Business?
Copilot Chat is ideal if:
- You want to trial AI safely
- You are cautious about data exposure
- You want writing and planning assistance
- You are not ready to invest in additional licences
Microsoft 365 Copilot makes sense if:
- Your team spends significant time in Outlook, Teams and Excel
- You want to reduce administration and meeting overhead
- Your SharePoint and OneDrive data is well structured
- You already enforce strong identity and access controls
Many businesses start with Copilot Chat, then selectively license Microsoft 365 Copilot for leadership, administration, sales or finance roles where the return on investment is highest.
Not sure which Copilot option is right for your business?
The Business Solutions team at Gunners Business Solutions can help you understand what Copilot access you already have, assess whether Microsoft 365 Copilot will deliver real value, and ensure your environment is configured securely before rollout.
Get in touch with GBS to review your Microsoft 365 setup, licensing and security posture, and make sure Copilot is working for your business—not creating risk.