Copilot Chat vs. Microsoft 365 Copilot: Understanding the Key Differences

Posted on:  03/31/2025

In the rapidly evolving world of AI-powered productivity tools, Microsoft has introduced two game-changing solutions: Copilot Chat and Microsoft 365 Copilot. While these tools share similar names and some functionalities, they serve distinct purposes and offer different capabilities. This article will delve into the key differences between Copilot Chat and Microsoft 365 Copilot, helping you understand which tool might be best suited for your needs.

Understanding Microsoft Copilot Chat

Microsoft Copilot Chat, also known simply as Copilot Chat, is a powerful AI-driven tool available to a wide range of Microsoft users. Here are the key features and characteristics of Copilot Chat:

• Availability: It's accessible to anyone with a Microsoft Business or Enterprise license, including Standard, Premium, E3, and E5 accounts, and A3 and A5 accounts.
• Functionality: Users can perform web searches and enjoy enterprise data protection.
• Cost: Copilot Chat is included at no additional cost for eligible license holders.
• Data Sources: It primarily uses public online data and does not access your organization's internal Microsoft 365 data.
• Access Points: Copilot Chat can be accessed through Bing, Microsoft Edge, Windows 11 and Window 10, Teams, Outlook, and at m365.cloud.microsoft/chat.

YouTube Video on Microsoft 365 Copilot vs. Microsoft Copilot Chat

Understanding Microsoft 365 Copilot

Microsoft 365 Copilot, on the other hand, is a more advanced and specialized tool designed to integrate deeply with Microsoft 365 applications. Here's what sets it apart:

• Licensing: It's a premium add-on that requires a separate subscription.
• Cost: Priced at $30 per user per month, billed annually.
• Integration: Deeply integrated with Microsoft 365 apps like Excel, Word, PowerPoint, Teams, and more.
• Data Access: Can access and utilize your organization's internal Microsoft 365 data.
• Advanced Features: Offers more sophisticated capabilities within each Microsoft 365 application.

Microsoft 365 Copilot is designed to enhance productivity within the Microsoft 365 ecosystem. It can help with tasks like summarizing long documents, creating presentations, analyzing data in Excel, and much more, all while leveraging your organization's own data and content.

The image below shows M365 Copilot. 

Licensed user - $30 a month

1. User signed in
2. Copilot icon
3. Work/Web - Copilot Chat doesn't have Work/Web showing. All chats are web chats.
4. Enterprise Data Protection - both Copilot Chat and M365 Copilot have EDP. 
5. Prompt box

The image below shows Carol Wilson signed in. Carol doesn't have an Microsoft 365 license. The screen looks extremely similar to the user with an M365 license. One big difference, besides the subsciption fee, is Work/Web doesn't show. Copilot Chat only does Web, even though Web doesn't show.

 

Identifying Your Copilot License

It's important to know which Copilot tool you have access to. Here's how you can identify your license:

For Copilot Chat:

• You'll have access to the basic chat interface
• No integration with Microsoft 365 apps on the ribbon
• Web and Work tabs not present

For Microsoft 365 Copilot:

• You'll see the Copilot icon in the ribbon of Microsoft 365 apps (see the image below)
• Advanced features within each app will be available
• You can access organization-specific data and content

Where do files go when I use the add a file icon to upload files?

Both Copilot Chat and M365 Copilot have a file upload icon. It looks like a paperclip and is called add a file. After uploading files, where do they reside? They reside in a folder created in OneDrive called Microsoft Copilot Chat Files. See the two images below. 

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