Copilot Chat: what do you get free, and what not?

In briefWhat this article is about

Two questions reach us more often than any other about Copilot, and they contradict each other. The first is whether that free Copilot is actually good for anything. The second is why a paid licence would be needed when there is already a Copilot on screen. Both come from the same problem: there are now three things inside Microsoft 365 called Copilot, and nobody has written down where one stops and the next begins.

This article puts that line on paper, without pushing you one way or the other. You will read what Copilot Chat can do today, what it demonstrably cannot do, what your administrator has to switch on before it works, and at which point a paid licence pays for itself. The amounts themselves are in a separate article on what Microsoft 365 Copilot costs; this one is about capability.

01"Free" here means: included

Copilot Chat is not a trial period and not a limited edition that shuts down after thirty days. It is included with a subscription you are already paying for, and it stays. That distinction matters more than it sounds, because it means you do not have to make a purchasing decision or free up a budget for it.

The subscriptions that include Copilot Chat are Microsoft 365 Business Basic, Business Standard and Business Premium, the enterprise variants E3, E5 and E7, the frontline variants F1 and F3, the standalone Teams subscriptions including Teams Essentials and Teams Rooms, and on the Office 365 side E1, E1 Plus, E3, E5 and F3. Education uses the A variants and government the G variants. Licences carrying the "(no Teams)" suffix are covered as well.

There is one condition that goes wrong in practice more often than the licence: the user has to sign in with a Microsoft Entra work account. Anyone who opens copilot.microsoft.com on a work laptop and signs in there with a personal Microsoft account is using the consumer version. It looks almost identical and is not covered by the enterprise protection described later in this article.

02Three labels, three different experiences

Since 2026 Microsoft shows a label inside the apps themselves, so a user can see which variant they are looking at. That label explains nearly all of the confusion on the floor, because two colleagues on the same subscription can have different labels.

The middle row is the least known and, for many organisations, the most interesting. Without spending anything, users get a limited set of Copilot features in Word, Excel, PowerPoint and OneNote: drafting and rewriting a document, analysing data and building formulas, creating or summarising a presentation, drafting an email and summarising a thread in Outlook, summarising and transcribing a meeting in Teams, and drafting survey questions in Forms. Whether your organisation has that middle variant depends on how your tenant is configured and on the capacity available at that moment.

That last point is not a detail. Microsoft calls this standard access: it depends on how busy the service is and can vary through the day. When demand peaks the user gets a notice, or a different model that finishes the task. Work in progress is not interrupted. Occasional users never notice. For someone who counts on it at nine every morning it is a nuisance, and that is what the add-on really buys: certainty.

03What you can do today without paying

The list is longer than most people expect. Everything below works with a work account and no additional licence:

• Chat with web data. Copilot Chat pulls information from Bing when that makes the answer better. Your administrator can turn that off, and in some government environments it is off by default.
• Upload files and have them analysed. Word documents, PDFs, Excel files and more. Drag the file into the window, pick it with the plus button, or type a forward slash to find a file you already have access to. Then summarise, compare and calculate.
• Calculate and chart with Python. Copilot Chat can run code for analyses a plain answer cannot handle.
• Generate images and supply images. Both fall under standard access, and both can be restricted by your administrator.
• Work with what you have open. In Teams and Outlook, Copilot Chat is aware of the conversation or message in front of you. The same applies to the Word, Excel and PowerPoint agents inside Copilot Chat and the file you have open.
• Summarise a web page or PDF in Edge. Copilot Chat in the Edge side pane reads the page you are on, including an intranet page if that access has been enabled.
• Your entire mailbox in Outlook. Since 1 July 2026 Copilot Chat in Outlook no longer reasons only over the open message, but over your full mailbox, calendar and meetings, and over enterprise content you can already reach through Microsoft 365. Explicitly without a paid licence.
• Dictation and read aloud. Speaking a request and having an answer read back works. Holding a real-time voice conversation is reserved for the paid variant.
• Revisiting earlier chats and creating a Copilot Page, where you keep an answer and edit it together with colleagues. That last one needs a OneDrive licence, which you almost certainly already have.
• Using and building agents in Agent Builder, as long as those agents rely on instructions and public websites. What falls outside that is covered in section 06.

The July change to Outlook deserves separate attention. For the employee whose main struggle is email and calendar, a large share of the benefit shifts to the free variant. It is also a good place to start measuring who picks it up unprompted, before you buy any licences.

04Where it stops

One difference explains all the others. Copilot Chat has no access to Microsoft Graph, Work IQ and the semantic index. That is the layer that lets Copilot search through your email, meetings, chats, documents and sites on its own, within the permissions you already had.

The consequence is very practical. Without that layer the user supplies the context. With it, Copilot finds the context itself. That is the difference between "summarise these three files" and "where do we stand on this project". The first works without a licence; the second does not.

What stands out is that the first four rows are identical. Under the bonnet, Copilot Chat runs on the same model as the paid variant; the difference lies in the sources it may reach and in priority when the service is busy. That makes it an excellent place to learn how to write a good request, which is the subject of our prompt engineering training, and to work out which parts of the job actually lend themselves to this.

05Eight requests from real training rooms

Abstract tables rarely convince anyone. Below are eight requests that come up in our training rooms, with whether each one works without a paid licence and why.

The rows marked "does not work" have something in common: they ask for something that sits somewhere in the organisation without saying where. That is exactly the work the paid add-on takes off your hands, and it is also where most of the time goes. Anyone whose job is mainly writing, summarising and analysing gets further on the free variant than expected.

06What your administrator has to arrange

Included does not mean there is nothing to do. Four settings decide whether Copilot Chat is usable in your organisation, and they are not all correct out of the box.

• Turn on web search. Without this setting the most important source falls away. It is governed by the web search policy in the Cloud Policy service for Microsoft 365.
• Pin Copilot Chat in the apps. Visibility drives use. If the icon is not in Teams and Outlook, half your people will never find it.
• Assign the AI administrator role. That lets someone manage the Copilot settings without having to be a global administrator.
• Decide about agents and images. Agents that search shared company content are off by default for users without a licence. Image generation is controlled separately.

There is also a report few organisations know about: the Copilot Chat usage report in the admin centre shows how many people use it, how many prompts are submitted and how that develops over seven, thirty, ninety and a hundred and eighty days. That report works for users without a paid licence too. It is the cheapest baseline measurement available, and a factual basis for deciding how many licences you will actually need. How to go about that is set out in why Copilot rollouts stall.

07Agents: where the meter starts running

Agents are the part where free and paid run into each other, and where organisations most often misjudge things. The dividing line is sharper than it looks and comes down to one question: where does the agent get its knowledge?

An agent that has to make do with instructions and public websites costs nothing extra. It is available without a licence, appears in the store under your existing settings, and your users can build one themselves in Agent Builder from the chat window. Think of an agent that knows your own writing guidelines and reviews text against them, or one that answers questions based on your public website.

An agent that has to reach shared company content, in SharePoint or through a connector, is billed on consumption in Copilot Credits. For users without a licence that is off by default; the administrator switches it on by connecting prepaid capacity or a pay-as-you-go policy. What an answer costs depends on how the agent is built: a single answer that first searches your documents and then composes something consumes a multiple of a simple reply.

08What happens to your data

The question that comes up at every organisation, and rightly so: if it costs nothing, what happens to what we type into it? The answer is that for users with an Entra work account, Copilot Chat is covered by enterprise data protection, and that protection carries no surcharge.

Concretely, that means four things. Prompts and responses fall under the same contractual terms as your email in Exchange and your files in SharePoint. They are not used to train models. They are logged in Exchange so that auditing and eDiscovery remain possible, which for several sectors is a precondition for using it at all. And files a user uploads end up in that user's own OneDrive for Business, where they can be deleted.

For users in the European Union the EU Data Boundary applies on top of that: their traffic stays inside it. Your existing permissions, retention policies and sensitivity labels continue to apply, and Copilot adds no access that someone did not already have.

09When you do have to pay

There are four situations in which the free variant demonstrably falls short. If none of them sound familiar, there is little reason to pay before you have measured.

1. Copilot has to do the searching. As soon as "where is that filed" is part of the work, you need Microsoft Graph and therefore the add-on.
2. People lean on it all day. Standard access is fine for occasional use and frustrating for anyone who builds their working day around it.
3. The full Copilot inside the apps. Anyone who wants the complete experience in Word and Excel with priority during busy periods will not get there on the middle variant.
4. Heavy use of agents on your own sources. At volume, metered consumption becomes more expensive than a licence. Where that tipping point sits depends on how those agents are built.

For every other case there is a cheaper order of steps. Open Copilot Chat up for four weeks to the department you have in mind, teach people how to work with it, and look in the usage report to see who picks it up unprompted. That list is a better basis for distributing licences than any survey done in advance, and it costs nothing. If the question of which tool it should be is still open, Copilot, ChatGPT or Claude lines up the four platforms, and the AI tools and Copilot page sets out which training fits which situation.

In closingA level-headed conclusion

The free Copilot is neither a cut-down demo nor a replacement for the paid one. The model underneath is the same; you simply supply the context yourself. For writing, summarising, analysing and, since July, for the mailbox as well, that takes you surprisingly far. For the question of what was agreed somewhere in the organisation, it does not.

What holds organisations back in practice rarely has to do with the licence. Usually nobody knows what is already sitting there. The biggest gain we see in training rooms therefore comes from people working out which part of their job actually suits this, rather than from a button being switched on. You can learn that with what you already have today, and buy what is still missing after that.

If you would rather do that with guidance, our Copilot Chat training is built for exactly this: working with what is available without a licence, using real documents and real questions. If the conversation is mainly about the rollout rather than the buttons, the AI adoption training is the better starting point. If you would rather read up first on what Copilot does inside the apps, that is written out in the complete guide to Microsoft 365 Copilot.

SourcesVerified on 12 September 2026

• learn.microsoft.com – Overview of Microsoft Copilot Chat, the comparison table against Microsoft Copilot, the three in-product labels and the explanation of standard access
• learn.microsoft.com – Manage Microsoft Copilot Chat, the full list of subscriptions that include Copilot Chat and how to remove access
• learn.microsoft.com – Minimum requirements for Microsoft Copilot Chat, the Entra account, turning on web search, the AI administrator role and pinning it in the apps
• learn.microsoft.com – Microsoft Copilot overview, the three licence variants side by side and what Microsoft 365 Copilot (Basic) does in Word, Excel, PowerPoint, Outlook, OneNote, Teams and Forms
• learn.microsoft.com – Frequently asked questions about Copilot Chat, the feature list covering Copilot Pages, file upload, image generation, code interpreter, dictation and read aloud, and the note that real-time voice is for licensed users only
• learn.microsoft.com – Privacy and protections in Copilot Chat, the four ways to supply organisational content, the logging in Exchange and the green shield
• learn.microsoft.com – Enterprise data protection, the contractual terms, the commitment not to train on your data and the EU Data Boundary
• learn.microsoft.com – Using agents in Microsoft Copilot Chat, agents on instructions and public websites at no extra cost, agents on shared company content billed on consumption and off by default
• learn.microsoft.com – Microsoft Copilot release notes, the 1 July 2026 change letting Copilot Chat in Outlook reason over the whole mailbox, calendar and meetings without a paid licence
• learn.microsoft.com – The Copilot Chat usage report, active users and prompts across seven to a hundred and eighty days, for every licence type
• learn.microsoft.com – Requirements for Copilot Pages and Copilot Notebooks, the OneDrive licence Copilot Pages needs
• support.microsoft.com – Standard versus priority access, which features it affects and what happens when capacity runs short