- Where to open Copilot Chat
- The three labels and what they mean
- What Copilot Chat can do without a licence
- The Outlook exception most people miss
- Choosing a model in Copilot Chat
- What a Microsoft 365 Copilot licence adds
- The agents that build files for you
- Privacy and admin points
- My verdict
- Frequently asked questions
Microsoft 365 Copilot Chat is the secure AI chat that comes with eligible Microsoft 365 work and school accounts, with no Microsoft 365 Copilot licence needed. It answers from the web and the files you give it, and in Outlook it can also read your inbox and calendar. A paid Copilot licence adds reasoning across all your organisation's data.
If your business uses Microsoft 365, you probably have Copilot Chat already and may not know it. The confusing part is that Microsoft shows different labels depending on what you've paid for. Here's what Microsoft's own documentation says you get, checked as of October 2026.
Where to open Copilot Chat
- Copilot Chat in the Microsoft Copilot app at m365.cloud.microsoft/chat, which Microsoft calls the preferred web experience.
- The Microsoft Copilot web app at copilot.cloud.microsoft.
- Inside supported apps such as Outlook and Teams, depending on your subscription.
- The side pane in Microsoft Edge.
The three labels and what they mean
Microsoft shows a label in Word, Excel, PowerPoint, OneNote and the Copilot app so you can tell which version you're on:
| Label you see | What it means |
|---|---|
| Microsoft 365 Copilot (Premium) or (Pro) | You have the Copilot add-on licence: the full experience and priority access in Word, Excel, PowerPoint and OneNote |
| Microsoft 365 Copilot (Basic) | No add-on licence, but standard access to Copilot in those apps |
| Copilot Chat (Basic) | No add-on licence and no Copilot chat inside Word, Excel, PowerPoint and OneNote |
What Copilot Chat can do without a licence
- Research and summarise information from the web.
- Analyse files and documents you upload.
- Generate images.
- Answer questions about organisational content in specific Microsoft 365 experiences.
- Use models such as GPT-5, with standard access that depends on service capacity.
Microsoft is open that standard access means quality and speed can vary when the service is busy. If it isn't available at a given moment, Copilot tells you rather than interrupting a task already in progress.
The Outlook exception most people miss
This is the detail I'd tell every small business owner. Without a licence, Copilot Chat is mostly grounded in the web and whatever you paste or upload. But Copilot Chat in Outlook goes further, even without a Microsoft 365 Copilot licence. Microsoft says it can answer questions across your emails, calendar items, meetings, chats and a limited set of related files. Microsoft's own example prompts show the idea:
Example prompt from Microsoft
Summarize my emails from the last week related to Project Alpine.
Example prompt from Microsoft
When is my next 1:1 with my manager?
It still respects your permissions, so it won't show anything you couldn't already open.
You can also bring work content in yourself. Microsoft says you can copy and paste content into a prompt, upload files, or use agents that already have access to organisational content. For a quick job, pasting the paragraph you want rewritten is often faster than waiting for a licence decision.
Choosing a model in Copilot Chat
- Open Copilot Chat and look for the model selector at the top right.
- Leave it on Auto to let Copilot pick a model for each prompt in real time.
- Choose Quick response for routine questions where speed matters.
- Choose Think deeper for complex or open-ended questions; Copilot takes longer, plans and checks its work.
What a Microsoft 365 Copilot licence adds
A paid licence extends Copilot across your organisation's data through Microsoft Graph, Work IQ and semantic indexing, so it can pull together emails, meetings, chats and documents in one answer. It also adds priority access, advanced reasoning models and advanced agents. Two features Microsoft ties to the licence are worth knowing:
- The Word, Excel and PowerPoint Agents, which create a full document, workbook or deck from a description and save it to OneDrive, are only for users with a Microsoft 365 Copilot licence.
- Microsoft Copilot Search, the AI search across your work files and connected apps, needs an eligible Copilot licence too, at no extra cost on top of it.
The agents that build files for you
With a Copilot licence, the Word, Excel and PowerPoint Agents appear under the Agents or Tools menu in the Microsoft Copilot app. You describe the file, answer any clarifying questions, check the preview and the finished file lands in OneDrive. Microsoft's sample prompts give a feel for the level of detail they handle:
Example prompt from Microsoft
Create a 2-page project proposal with an introduction, problem statement, solution overview, and timeline.
Work with meWant AI doing the heavy lifting in your marketing?
I build the systems that handle the boring 80 percent, so you get your week back. Done properly, with the human kept in.
Example prompt from Microsoft
Build a 10-slide marketing strategy presentation with a modern design.
One detail that trips people up: Microsoft says if you can't see these agents, your admin may need to turn on access to Anthropic's AI models for your organisation. Microsoft also says what the agents draw on depends on the account: with a Copilot licence they pull in your files, emails and meetings automatically, while personal accounts use your own files and notes stored in OneDrive.
Deciding which AI licences your team needs? I help businesses make that call, and you can see how in my AI consultancy work.
Privacy and admin points
Copilot Chat follows your existing Microsoft 365 permissions, retention policies and sensitivity labels, and includes enterprise data protection for eligible work and school accounts. In some US government cloud environments, Microsoft says web grounding isn't turned on by default, so check with whoever manages your tenant if answers seem to ignore the web.
For the bigger picture on licences and versions, read my guide to what Microsoft 365 Copilot is. If you mainly work in email, see how to use Copilot in Outlook.
My verdict
Get the most from the free Copilot Chat before you buy anything. For most small teams it's good enough for drafting, research and file questions, and the Outlook grounding is a real time saver. Buy the Copilot licence when people keep asking questions that need everything at once: last week's meetings, the client's emails and the shared proposal in one answer.
The search side of Copilot has changed, and what happened to Copilot Search explains the two versions.
Frequently asked questions
Is Microsoft 365 Copilot Chat free?
Microsoft says using Copilot Chat doesn't require a Microsoft 365 Copilot licence; it's included with eligible Microsoft 365 licences.
What's the difference between Copilot Chat and Microsoft 365 Copilot?
Copilot Chat is mainly web grounded; the paid licence reasons across your organisation's emails, meetings, chats and files.
Where do I find Copilot Chat?
At m365.cloud.microsoft/chat, copilot.cloud.microsoft, in Outlook and Teams, and in the Microsoft Edge side pane.
Can Copilot Chat read my emails?
In Outlook, yes. Microsoft says Copilot Chat in Outlook can answer across emails, calendar items, meetings and chats without a licence.
What does Copilot Chat (Basic) mean?
It means you don't have the add-on licence and don't get Copilot chat inside Word, Excel, PowerPoint and OneNote.
