Microsoft 365 Copilot Chat – Feature breakdown

On January 15^th, Microsoft made a big announcement about Microsoft 365 Copilot Chat, which was introduced as Copilot for all. Microsoft revamped everything from the product name to the URL and licensing (but not the logo this time 😊).

As with every Microsoft announcement, it can be hard to separate marketing from actual product changes. In this blog post, we will clarify the announcement so admins like yourself can better understand what it is and what features (and maybe extra costs) it could bring to your organization.

Microsoft 365 Copilot Chat name change 

If you look at the screenshots of Microsoft 365 Copilot Chat, your first impression might be that this has been there for a while, and you are right. Here is a bit of the history of the names over the past 24 months:

• Business Chat (Original name when Microsoft announced Copilot)
• Microsoft 365 Chat
• Microsoft Copilot with Graph-Grounded Chat
• Microsoft 365 Copilot Chat (Today!)

However, do not be surprised if many administrators, developers, or even internal FTEs at Microsoft call it “BizChat,” as this has been the internal name used. If you look at the network calls / page source on Microsoft 365 Copilot Chat, you will still find BizChat-related calls.

Microsoft 365 Copilot Chat new features

As soon as users log in, they will now see Copilot in the Microsoft 365 User Portal, whether they have a Copilot license or not. If they have a Copilot license, they will see both a Work and a Web tab (like before), but what’s new is that even non-licensed users will see this chat experience everywhere.

To help us discuss the new features, we will use the following graph, which Microsoft shared on its official announcement page, to guide us in this blog.

Microsoft 365 Copilot Chat features

Let’s start with the chat features, where things didn’t change much. The free Microsoft 365 Copilot Chat will still be grounded in the web, and it will have access to Copilot Pages and be able to upload a file. One of the amazing things about uploading a file is that even if it’s free, Microsoft 365 Copilot Chat has Enterprise Data Protection, meaning the content will not be used to train the model.

If you’re wondering what the last two are, they are agents capabilities. Image generation is the ability to generate images (think of Microsoft Designer for personal accounts), and the Code Interpreter is a tool designed to solve complex tasks via Python code. It uses the reasoning model to write and run code, enabling users to solve complex math problems, analyze data, generate visualizations, and more.

Copilot Agents features

In 2025, Microsoft is all about Agents, so the bulk of the new functionality is located here. This is also where a lot of the confusion is around licensing.

The part that confused me the most, until I was able to find someone directly at Microsoft, was the contradiction between line 1: 

• “Create agents using Copilot Studio, including SharePoint Agents” (Included for Free)

And line 4:

• “Use agents grounded in work data” (SharePoint is work data) – Metered (Pay as you go)

However, I did get confirmation that the free version of Microsoft 365 Copilot Chat allows anyone to create agents grounded in work data, such as SharePoint files, but you need to pay to use them. Of course, administrators will need to be very careful if they enable Pay as You Go in Copilot Studio since today, there are no admin controls on who can create a new agent based on work data and who they can share it with. Each call that leverages work data/graph data will cost an organization $0.30 USD, which means organizations could rack up huge costs for agents that an administrator has never approved.

Other features, such as using agents grounded in Web data & Discover and pin agents, are pretty cool. As you can see in the screenshot below, in which I do not have a Copilot license, I can add agents to my Copilot chat experience.

Are there any agents here you do not want users to see? In this case, you need to block or restrict their access to certain users from the Teams Admin Center in the Manage Apps category. In the example below, you can see that Dropbox is available as a Copilot Agent because of the Copilot icon in the “Supported on” column.

The last line in the agent’s category is also very interesting because it tells us that even if we have a $30/per user / per month Microsoft 365 Copilot license, autonomous agents will be Pay As You Go. So, those types of agents will not be included and will always cost extra.

Personal Assistant features

Regarding the personal assistant features, this section is dedicated to showing off the extra features you get from Microsoft 365 Copilot. None of the functionalities below are available in the free Microsoft 365 Copilot Chat.

There are still a few interesting tidbits we can focus on. First, Microsoft separates work data (SharePoint) vs. Personal Data (Outlook mailbox, OneDrive), so even in Pay As You Go with Microsoft 365 Copilot Chat, you will not be able to ground your agents in the user’s mailbox or OneDrive for business.

The other interesting piece of information is that both Copilot Actions and Pre-built M365 Agents are not shown as “Included” in the graph but as “In Preview.” We know that Microsoft never announces licensing until a feature goes into General Availability, but I really expected those to be marked as included, even if they are currently in preview.

Copilot Control System features

Our last category is the IT and Governance, or the Copilot Control System, as Microsoft brands it. While both the free Microsoft 365 Copilot Chat and Microsoft 365 Copilot include Enterprise Data Protection, IT Management controls, and Agent Management, only the paid version of Microsoft 365 Copilot includes SharePoint Advanced Management and Copilot Analytics (as announced at Microsoft Ignite). The Microsoft 365 Copilot license also gives us access to multiple other pre-built reports and advanced analytics to measure the ROI of our paid Copilot implementation.

Microsoft 365 Copilot Chat – Takeaways and resources

Microsoft 365 Copilot Chat is an evolution of the original Microsoft 365 Business Chat, enabling every Microsoft 365 user to start experiencing AI without an added cost.

For organizations that aren’t sure about the ROI of Copilot and do not want to commit to the $360/user/year Microsoft 365 Copilot license, they can start with a Pay As You Go subscription where they either buy prepaid messages or pay depending on usage as they ramp up, and only license their most active users to optimize costs. Furthermore, this update also brings agents front and center for anyone to start creating, whether they are licensed for Copilot or not.

As an administrator, you should carefully consider whether to enable Pay as You Go for your users without a Microsoft 365 Copilot license. While properly created agents can definitely increase productivity, agents that are not optimized could increase costs without any real benefit.

Below are some resources aimed at IT Professionals to help you get the full picture and prepare your organization:

• IT Set up and Controls Guide: aka.ms/Copilot/ITControlsGuide 
• New agent overview guide: https://aka.ms/Copilot/AgentOverviewGuide
• Copilot Studio blog (includes pricing info): http://aka.ms/mcscopilotchat