What is Microsoft Copilot? A plain-English guide

Microsoft Copilot is the artificial intelligence assistant that Microsoft has built into its products, from the Microsoft 365 apps your team uses every day to Windows, the Edge browser and the web. It uses the same kind of large language models that power tools like ChatGPT, wrapped inside Microsoft's own apps and, in its paid business form, connected to your organisation's own information.

This guide explains, in plain English, what Microsoft Copilot is, how it works, what it can do, the different versions available, whether it is free, and what you need to get started. It is written for business owners and IT decision-makers who want a clear answer rather than marketing language.

What is Microsoft Copilot?

Microsoft Copilot is a generative AI assistant. You give it an instruction in ordinary language, a prompt, and it writes, summarises, analyses or answers based on what you have asked. The underlying intelligence comes from large language models, the same class of models that sit behind ChatGPT, which Microsoft combines with its own products and, for business users on the paid plan, with your company's own data.

The name covers a family of tools rather than a single product. Some versions are free and answer general questions from the open web. The paid business version works inside Word, Excel, PowerPoint, Outlook and Teams, and grounds its answers in your organisation's documents, emails and chats, while respecting the access permissions you already have in place.

How does Microsoft Copilot work?

At its simplest, Copilot takes your prompt, sends it to a large language model, and returns a response. What makes the business version different from a public chatbot is where it looks for information.

The paid Microsoft 365 Copilot connects to your organisation's content through Microsoft Graph, the service that already understands your files, emails, calendars and chats. When you ask it to summarise a document or draft a reply, it draws on your own data, not just the public web, and it only ever surfaces information the individual user already has permission to see. Your data is not used to train the underlying models, and it stays within your Microsoft 365 environment.

Because Copilot runs on the same family of OpenAI models that power ChatGPT, the intelligence is comparable. The difference for a business is governance: with Copilot, that intelligence sits inside the Microsoft 365 tenant you already manage, under the security and compliance controls you already run. If you want a fuller comparison of the two assistants, we cover it in our guide to Copilot vs ChatGPT.

What can Microsoft Copilot do?

Copilot is designed to remove routine effort across the tools people already use. In Word, it drafts, rewrites and summarises documents from a short prompt. In Excel, it explains trends, suggests formulas and helps analyse data without deep spreadsheet knowledge. In PowerPoint, it turns a document or a few notes into a first-draft presentation. In Outlook, it summarises long threads and drafts replies so inboxes move faster. In Teams, it recaps meetings, captures action points and answers questions about what was discussed.

Alongside the in-app features, the Copilot chat experience answers questions in natural language, and the paid version can answer them using your own documents and emails. The result is less time spent starting from a blank page and more time on the work that needs a human.

The different types of Microsoft Copilot

Because the word Copilot is used across several products, it helps to know which one people mean.

Microsoft Copilot (free) is the general chat assistant available on the web and in the Windows and mobile apps. It answers from the open web and does not see your company files.

Microsoft 365 Copilot Chat is a secure chat experience included with many Microsoft 365 business subscriptions. It is web-grounded and protected by enterprise data protection, so staff can use AI safely without a paid add-on, although it does not reach into your organisation's files on its own.

Microsoft 365 Copilot is the paid, per-user add-on for business. This is the version that works inside Word, Excel, PowerPoint, Outlook and Teams and grounds its answers in your company's own data.

Copilot Pro is a paid plan for individuals rather than organisations. Windows Copilot is the assistant built into Windows, and GitHub Copilot is a separate tool that helps software developers write code. Copilot Studio lets organisations build their own custom copilots and agents for specific tasks.

For most businesses, the choice that matters is between the free chat experiences and the paid Microsoft 365 Copilot that works across the Office apps.

Is Microsoft Copilot free?

Partly. There is a genuinely free Microsoft Copilot: the web and app chat assistant that anyone can use, and, for organisations, Microsoft 365 Copilot Chat, which is included with many business subscriptions and adds enterprise data protection. These free experiences are grounded in the open web and are a sensible place for many teams to start.

What is not free is the version that works inside your Office apps and understands your own data. That is Microsoft 365 Copilot, a paid add-on licence. So the honest answer is that you can use Copilot for general tasks at no cost, but bringing it into Word, Excel, Outlook and the rest, grounded in your company information, requires the paid licence.

What does Microsoft Copilot cost, and what do you need?

Microsoft 365 Copilot is licensed as a per-user, per-month add-on that sits on top of a qualifying Microsoft 365 business or enterprise plan. In other words, you need an eligible Microsoft 365 subscription first, and then you add Copilot licences for the people who will use it.

We have deliberately not quoted a specific per-user figure here, because Microsoft adjusts its pricing and packaging over time, and it raised its Microsoft 365 and Office 365 list prices in July 2026. For the current cost, and the plan that fits your organisation, speak to us and we will confirm the up-to-date figures.

How to get started with Microsoft Copilot

Getting value from Copilot is less about switching it on and more about preparing for it. The usual steps are to confirm you are on a qualifying Microsoft 365 plan, add Copilot licences for the right people, and, importantly, get your data and permissions in order first, so that Copilot only ever surfaces what each person should see. A short pilot with a few teams, plus some simple training on writing good prompts, tends to produce far better results than a blanket rollout.

This preparation, the licensing, the data governance and the adoption, is exactly where a managed IT partner earns its place.

Getting Microsoft Copilot right with Managed247

Copilot is powerful, but the benefit comes from deploying it well: the right licences, clean data and permissions, and a rollout your people actually adopt. We help UK organisations do exactly that, from licensing advice through to effective Copilot deployment and the governance that keeps your information safe. If you are considering Copilot for your business, get in touch and we will help you plan it properly.

Frequently asked questions

• What is Microsoft Copilot?

  Microsoft Copilot is Microsoft's generative AI assistant. It uses large language models, the same class of models behind ChatGPT, to write, summarise, analyse and answer questions across Microsoft 365, Windows and the web. The paid business version also works inside the Office apps and uses your own company data.

• Is Microsoft Copilot free?

  There is a free version. The Microsoft Copilot web and app chat is free to use, and Microsoft 365 Copilot Chat is included with many business subscriptions with enterprise data protection. The paid Microsoft 365 Copilot add-on is what brings the assistant into Word, Excel, Outlook and Teams and grounds it in your own data.

• How much does Microsoft Copilot cost?

  Microsoft 365 Copilot is priced as a per-user, per-month add-on on top of a qualifying Microsoft 365 plan. Microsoft updates its pricing over time, so rather than quote a figure that may date, we will confirm the current cost and the right plan for your organisation. Contact us for up-to-date pricing.

• Does Microsoft Copilot use the same AI as ChatGPT?

  Copilot runs on the same family of OpenAI models that power ChatGPT, so the underlying intelligence is comparable. The difference is that Copilot works inside your Microsoft 365 environment, under your existing security and permissions. Our Copilot vs ChatGPT guide compares the two in more detail.

• What is the difference between Microsoft 365 Copilot and Copilot Chat?

  Copilot Chat is a free, web-grounded chat experience included with many business plans. Microsoft 365 Copilot is the paid add-on that works inside the Office apps and grounds its answers in your organisation's own documents, emails and chats.

• What do you need to use Microsoft 365 Copilot?

  You need a qualifying Microsoft 365 business or enterprise plan, and then a Copilot add-on licence for each person who will use it. It is also worth reviewing your data and access permissions first, so that Copilot surfaces only what each user should see.

• Can Microsoft Copilot access our company data?

  Only the paid Microsoft 365 Copilot connects to your company data, and it does so through Microsoft Graph while respecting the permissions each user already has. The free Copilot experiences answer from the open web and do not reach into your files. Your data is not used to train the models and stays within your Microsoft 365 environment.