Privacy regarding Copilot Chat

Mercer Kaia 0 Reputation points
2026-08-28T16:31:11.2266667+00:00

Hello, The employees in our company have a Microsoft O365 E3 license, not a specific M365 Copilot license.

If our employees now want to use the Copilot Chatand "question" internal company documents, can this be done without hesitation if the tenant configuration (data boundary) is appropriate? Are there any differences in data protection in terms of use here, contrary to an additional Copilot license?

We are currently creating our own agents with Copilot Studio and would like to work with company knowledge here as well, which will then be billed on a pay-as-you-go basis. The same question arises here: Are agents from Copilot Studio more "secure" in terms of privacy/security than using Copilot Chat as an add-on in the O365 E3 license?

Consideration:

Does it make sense to provide an explicit agent to work with company knowledge instead of Copilot Chat to ensure increased data security?

Microsoft 365 and Office | Install, redeem, activate | For business | Other
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  1. Ivory 1,155 Reputation points Independent Advisor
    2026-08-28T16:41:49.4766667+00:00

    Hi Mercer,

    Standard Copilot Chat under your M365 E3 license operates under Microsoft’s Enterprise Data Protection (EDP). Your company data, uploaded documents, and chat prompts remain strictly private, encrypted, and inside your tenant boundary. Your data is never used to train foundation AI models.

    Under the E3 license, Copilot Chat only analyzes internal company documents that employees manually attach or upload into the chat window. (An additional M365 Copilot license would be required for automatic background searching across all Microsoft Graph data like emails or SharePoint sites.)

    Between Copilot Chat and Copilot Studio Agents, both solutions share the exact same enterprise-grade security and privacy boundaries. However, custom Copilot Studio Agents provide superior control:

    • Agents can be locked strictly to vetted, official company SharePoint sites or repositories.
    • They ensure employees receive answers only from approved corporate knowledge, preventing accidental over-sharing or uploading of sensitive files.

    Using Copilot Chat under your current E3 license is completely safe from a data privacy standpoint. However, deploying custom Copilot Studio Agents is the recommended approach for company knowledge sharing, as it provides tighter control over source data, better governance, and a tailored user experience without requiring full per-user add-on licenses.

    For more information, you can consult:

    I hope this provides enough clarity and helps you stay inform with your current situation.

    Thank you for your patience and your understanding. If you have any questions or need further assistance, please feel free to share them in the comments on this post so I can continue to support you.  

    If the answer is helpful, please click 'Yes' and kindly upvote it.

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