What is Microsoft 365 Copilot, and what will it do in Word, Excel and Outlook?

Yesterday, 16 March 2023, Microsoft showed what it believes office work will look like next. At a special AI event, CEO Satya Nadella introduced Microsoft 365 Copilot, an AI assistant built into the apps that millions of people use every day: Word, Excel, PowerPoint, Outlook and Teams. Instead of hunting through menus, you describe what you want in plain language, and Copilot drafts it.

It comes two days after OpenAI released GPT-4, the model that powers it, and a few days after Google previewed similar AI features for its own Workspace apps. The race to put chatbots inside everyday software is now fully under way.

What Microsoft announced

Copilot will show up in two ways. Inside each app, it appears as a chat panel at the side of the screen that can act on whatever you are working on. Across apps, a new feature called Business Chat can pull together your calendar, email, chats, documents, meetings and contacts, so you can ask questions like "Tell my team how we updated the product strategy" and get a status update drawn from that morning's messages. Business Chat will be reachable from Microsoft365.com, from Bing when signed in with a work account, or from Teams.

Here is what Microsoft says each app will be able to do:

Jared Spataro, who leads Microsoft 365, was open about limits. In his announcement he writes that Copilot will sometimes be right and sometimes "usefully wrong," giving you a starting point that still needs your judgment. You decide what to keep, edit or throw away.

How it works: the "Copilot System"

Microsoft stresses that Copilot is not simply ChatGPT pasted into Office. It describes a Copilot System with three parts: a large language model (LLM), including GPT-4; the Microsoft 365 apps; and the Microsoft Graph, the behind-the-scenes map of your organization's files, emails, meetings, chats and contacts.

The key idea is grounding: before the AI answers, the system fetches real information from your own work data, so the answer is anchored in your documents rather than only in what the model learned during training. The Verge describes the steps roughly like this:

1. You type a request in Word, such as "Draft a project proposal based on last week's meeting notes."
2. Copilot sends the request to the Microsoft Graph, which finds the relevant files and context you are allowed to see.
3. The system adds that context to your request and sends the enriched prompt to GPT-4.
4. GPT-4's answer goes back through the Graph for further grounding plus security and compliance checks.
5. The final text, and any commands such as "insert a table," return to Word for you to review.

Think of it as an assistant who first walks to your filing cabinet, collects the right folders, and only then starts writing.

Using the notes from Tuesday's budget meeting and the latest sales spreadsheet, draft a one-page summary for my manager. Keep it under 300 words, list three open questions at the end, and mark any figure you are unsure of.

Why it matters, and what the concerns are

The potential reach is enormous. Microsoft's own argument is that most people use only a handful of the thousands of commands in its apps, and that plain language could unlock the rest. If Copilot works as shown, writing a first draft, building a deck or analyzing a spreadsheet becomes a conversation.

Business data raises obvious questions, and Microsoft addresses some directly. It says Copilot's models are not trained on a customer's own data or prompts, that it inherits a company's existing security and privacy rules, and that it only shows information a person already has permission to see. The company also says it links to sources and prompts users to fact-check.

Not everyone is reassured by the speed. The Verge points out that Microsoft recently let go of the ethics and society team in its AI group, and that accuracy matters more when the AI is working on real business documents. Microsoft's answer is to start small and learn as it goes.

When can you use Microsoft 365 Copilot, and what should you check first?

Not yet, for most people. Microsoft says it is testing Copilot with a small group of business customers, 20 of them according to The Verge, and will widen the preview in the coming months. It says it will share pricing and licensing details later, and that Copilot will come to all its productivity apps, including Viva and Power Platform. Earlier this month it announced a similar assistant for its Dynamics 365 business software.

If your organization uses Microsoft 365, now is a good time to prepare rather than wait. Because Copilot only shows what each person can already open, it will also surface any documents that are shared more widely than they should be. Checking who has access to which folders is sensible housekeeping either way.

And when Copilot does arrive, treat its drafts the way Microsoft itself suggests: as a fast first version. Read every summary against the source, check every number, and keep your own judgment as the final step.