Most Microsoft 365 users now have a Copilot button somewhere: in the browser, in Outlook, in Teams. Then the renewal quote arrives with a Copilot licence on it, and the obvious question follows. If we already have Copilot, what are we paying for?
The answer is that there are two different things with very similar names. One comes with your Microsoft 365 subscription. The other is a paid add-on that can search across your organisation's mail, files, meetings and chats. The difference is mostly about what the AI can see.
First, the names (again)
Microsoft renames things often, and it has done it again. As of September 2026, Microsoft Learn says:
- Microsoft 365 Copilot Chat is now called Microsoft Copilot Chat. This is the one included with eligible work accounts.
- Microsoft 365 Copilot is now called Microsoft Copilot. This is the paid licence. Organisations on the Microsoft 365 Business plans buy it as Microsoft Copilot Business.
The old names will hang around in the apps, licences and admin centre for a while. If a quote or a menu says "Microsoft 365 Copilot", it's the paid licence. If it says "Copilot Chat", it's the included one.
What Copilot Chat can see and do
Copilot Chat doesn't need a Copilot licence. People reach it at m365copilot.com, in the Microsoft Copilot app, in the Edge side pane, and inside supported apps such as Outlook and Teams, depending on your subscription.
Microsoft describes it as primarily web grounded. Out of the box it knows what's on the public web and what the person gives it: text they paste, files they upload or reference, and the context of the app they're in. In Outlook, it can also work with the person's inbox, calendar, meetings and chats. What it doesn't do is search broadly across your SharePoint sites, OneDrive files and Teams conversations to find things on its own.
In Word, Excel, PowerPoint and OneNote, people without the licence get what Microsoft labels "Microsoft 365 Copilot (Basic)", with standard access to Copilot chat in those apps. Licensed users see "Premium" or "Pro" and get the full experience with priority access.
Enterprise data protection applies to both
This is the part that matters most for privacy, and it's the same for both. Microsoft says Copilot Chat prompts and responses are processed within the Microsoft 365 service boundary under enterprise data protection, the same controls and commitments that apply to the paid Copilot. Prompts and responses aren't used to train the underlying foundation models. Microsoft acts as a data processor under its Data Protection Addendum and Product Terms.
Staff can check it's on by the green shield at the top of the chat, next to the New Chat button. Enterprise data protection applies to eligible work and school accounts, so if there's no shield, they're probably signed in with a personal Microsoft account and should switch.
Both versions respect your existing Microsoft 365 permissions, retention policies and sensitivity labels. Copilot only reaches content the person is already allowed to open. That sounds reassuring, and it is, provided your permissions are right.
What the paid licence adds
The Microsoft Copilot licence is where Copilot starts working across your organisation's content. Microsoft says the licensed experience is grounded through Microsoft Graph and Work IQ, with semantic indexing across Microsoft 365. In practice, a person can ask "what did we agree with the landlord about the lease renewal?" and Copilot will look through the mail, files and meeting notes that person has access to.
According to Microsoft's plan comparison, the licence also includes:
- Copilot inside Word, Excel, PowerPoint and OneNote with the full feature set.
- Copilot in Teams, where you have a Teams licence.
- Pre-built agents including Researcher and Analyst.
- Agent usage and Copilot connectors to external data, included rather than billed per use.
Agents in Copilot Chat
Agents blur the line a little. Users without a licence can use agents in Copilot Chat, including agents that have been given access to organisational content. Microsoft's comparison lists agent usage for those users as metered, meaning pay-as-you-go, billed through an Azure subscription your administrator links up. Copilot Chat and SharePoint agents are both on Microsoft's list of services available with pay-as-you-go billing.
That's handy for a trial. It's also a way for costs to creep up quietly, so set a budget and an owner before you switch it on. If you're planning to build agents that share team knowledge, read our guide to custom GPTs, Claude Projects and Copilot agents first.
When does the paid licence pay off?
The licence earns its keep when people spend real time hunting for information that already exists in Microsoft 365: long email threads, meeting follow-ups, finding the latest version of a document, pulling a summary out of a dozen files. It's less compelling for people whose AI use is mostly drafting and rewording, because Copilot Chat already does that well.
A sensible way to decide:
- Give everyone Copilot Chat first, with a short policy. Our shadow AI policy guide has a template.
- Fix your permissions before you buy any licences. The paid Copilot will surface every overshared folder. See Copilot oversharing and SharePoint permissions.
- License a small group whose work is heavy on meetings, email and documents, and give them a few weeks of normal work.
- Ask them what they'd miss if you took it away. That answer tells you more than any usage chart.
Licence prices change and vary by plan and region, so check the current figure with Microsoft or your provider rather than relying on an old quote.
Where Geidi fits
Geidi AI is Geidi's newest division, offering practical AI and automation built safely on the Microsoft 365 environments, infrastructure and security Geidi already manages, with the same fixed scopes, review gates and audit trails as its managed services. If you're weighing up Copilot licences and want a second opinion, start with a conversation.
Sources
- Microsoft Learn: Overview of Microsoft Copilot Chat (opens in a new tab)
- Microsoft Learn: Privacy and protections for Microsoft Copilot Chat (opens in a new tab)
- Microsoft Learn: Data, privacy and security for Microsoft Copilot (opens in a new tab)
- Microsoft Learn: License options for Microsoft Copilot (opens in a new tab)
- Microsoft Learn: Microsoft Copilot pay-as-you-go service overview (opens in a new tab)
- Microsoft: Compare all Microsoft 365 business plans (opens in a new tab)
