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For work or school accounts, Microsoft says Copilot prompts, responses, and Microsoft Graph data are not used to train foundation language models. Copilot can still surface work content a user already has permission to view, and it stores interaction records under Microsoft 365 contractual commitments. Before rollout, business owners should check sharing and permissions, decide how chats will be retained and audited, and understand the separate handling of web searches and regional processing.
Microsoft now calls Microsoft 365 Copilot “Microsoft Copilot” and Microsoft 365 Copilot Chat “Microsoft Copilot Chat.” Some licenses and experiences may retain the former names during the transition. Microsoft says the naming change does not alter its privacy, security, or compliance commitments. This FAQ covers organizational use with a work or school identity under Microsoft’s commercial terms—not consumer Copilot use with a personal account.
What contractual protections apply to business use?
Microsoft says organizational Copilot and Copilot Chat use is covered by the Microsoft Products and Services Data Protection Addendum (DPA) and Microsoft Product Terms, with Microsoft acting as a data processor. Its Enterprise Data Protection (EDP) documentation describes commitments and controls for that commercial context. The Microsoft EDP documentation says protections include encryption at rest and in transit, tenant isolation, and the application of identity, permissions, sensitivity labels, retention, audit, and administrative settings. These are Microsoft’s documented commitments, not an independent assessment of a particular tenant. Microsoft notes that the specific controls and policies vary with the underlying subscription.
That qualification matters: the name “Copilot” can refer to different experiences, identities, and entitlements. Confirm that employees are signed in with their organizational accounts and check which controls are available under the organization’s actual licenses.
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Are prompts, responses, and company data used to train AI models?
For organizational Copilot covered by Microsoft’s commercial terms, Microsoft says prompts, responses, and data accessed through Microsoft Graph are not used to train foundation large language models. Microsoft’s privacy documentation states that this applies to data used to ground responses as well as the interaction itself.
This answer is specific to organizational use. Do not assume consumer Copilot disclosures or settings are identical; personal-account use is a separate context.
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What information does Copilot use to answer a prompt?
Copilot can ground an answer in organizational content and context available through Microsoft Graph, such as a user’s documents, email, calendar, chats, meetings, and contacts. Microsoft says it only surfaces organizational data the user has at least view permission to access.
That permission boundary does not fix excessive access. If a SharePoint site, file, or shared link is available to more employees than intended, Copilot may make that already-accessible material easier for those employees to find. Review sharing and access before deployment rather than treating Copilot as a substitute for permissions management.
Where are prompts stored, and can administrators manage them?
Microsoft says Copilot interaction history includes prompts and responses and can include citations to the information used to ground an answer. These records are stored under the same contractual commitments as other Microsoft 365 content; Microsoft says they are encrypted at rest and are not used to train foundation models.
Administrators can use Content Search or Microsoft Purview to manage interaction records and set retention policies. Users can delete activity history through My Account. How long records remain depends on the organization’s retention configuration and subscription; there is no single retention period that applies to every tenant.
What happens when Copilot uses web search?
When web grounding is enabled, Copilot derives a short search query from the prompt and sends it to Bing. Microsoft says the query is sent over a secure connection with user and tenant identifiers removed, is not shared with advertisers, and is not used to train foundation models. Bing is a separate service with distinct data-handling practices, and Microsoft describes itself as an independent controller for that search service.
Microsoft’s EDP documentation says the EU Data Boundary and HIPAA coverage do not apply to web-search queries. Treat web grounding as a distinct data path when deciding whether employees should use it for particular work.
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Where is Copilot data processed, and what are the residency limits?
Microsoft says calls to the language model are routed to nearby regional datacenters, but may be routed to other regions when capacity is constrained. Its data residency documentation describes additional EU Data Boundary safeguards for EU users; it also says global traffic may be sent to the EU and other regions for model processing. The EU Data Boundary does not cover web-search queries, and Microsoft currently excludes Anthropic models from that boundary.
Microsoft says Copilot became a covered workload under its data residency commitments on March 1, 2024. The governing residency commitments are those in the Product Terms and DPA, so check the tenant’s geography and applicable terms rather than assuming every processing step stays in one location.
What should a small business do before deployment?
Microsoft’s deployment guidance recommends reviewing overshared or high-risk sites and sensitive content, locating ownerless or inactive sites, and using SharePoint Advanced Management assessments and Microsoft Purview. A practical sequence is:
- Review access first. Identify sites and content with broad or outdated access, then remediate permissions and sharing links that do not reflect intended access.
- Use interim discovery controls where needed. Microsoft lists Restricted Content Discovery and Purview Data Loss Prevention (DLP) as measures to reduce discovery or grounding of sensitive information while permissions are being addressed.
- Set secure sharing defaults. Review company-wide sharing groups and Anyone links, and use sensitivity-label controls where appropriate.
- Validate and monitor. Audit the changes and confirm that retention, search, and administrative controls work as intended for the organization’s subscription.
Microsoft’s guidance identifies licensing and administrator-role requirements. It describes a foundation that includes E3/E5 or Office 365 E3/E5 for relevant services and features, Copilot, and SharePoint Advanced Management (included with Copilot licenses) at the time its guidance was accessed. Entitlements can change; verify current licensing and role requirements before purchase or configuration.
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