September 18, 2025
BlogA Copilot Chat in Every Pot
This week, Microsoft announced it is rolling out Copilot Chat and web-grounded agents to the major Office applications. Given the naming confusion around the Copilot brand, the significance of this may not be entirely clear to everyone. In short, what’s happening is Microsoft 365 subscribers will get Copilot Chat in Word, Excel, PowerPoint, Outlook and OneNote —even if they aren’t among those covered by M365 Copilot licenses costing $30 per user per month.
Although M365 subscriptions jumped this year, which Microsoft attributed in part to M365 Copilot, Microsoft is still looking for ways to drive even more of the add-on M365 Copilot licenses. With its self-professed goal of a Copilot on every device, Microsoft arguably sees anything less than 100% adoption by its clients as unacceptable.
What’s In the Box?
What do you really get though, with chat in the apps? Users not licensed for M365 Copilot will be able to open Copilot Chat in a task pane on the right side of the app. This gives you access to the chat interface you know from the M365 Copilot app and website. Copilot Chat is tuned to respond based on that app you’re in. So, Copilot for Word will be focused on helping with documents, Copilot for Excel on data analysis, etc.
What you don’t get are the in-app Copilot companions and builders, indicated by an AI icon, that come with the M365 Copilot license. If you don’t have them, you may not miss them and when you do have them, you may find them annoyingly underfoot. However, they can be useful once you get used to them by providing AI-assisted actions, like drafting and revising text using natural language prompts, using auto-rewrite, or creating a summary of the content. Each application has a slightly different implementation of the companions and have actions related to the specific app.
What Can It Do?
The unlicensed Copilot Chat in Office apps is still constrained to web-grounding, so there’s no access to work data via the Microsoft Graph. Users can upload work files to the chat though to provide business context or use the built-in Context IQ which enables you to use a “/” in the prompt to open a file picker dialog with files relevant to you. Adding business context is practically the great equalizer with the licensed version though, since this is one of the better ways to draft new Office files. (And, in fact, Copilot for Word does not draw on business data in the Graph to create new documents anyway.)
With Copilot Chat, you also have access to web-grounded agents but accessing business-grounded agents still require the pay-as-you-go model (PAYG). And some agents, like Microsoft Researcher and Analyst, are not available as PAYG. They are available for no additional cost only to M365 Copilot licensees.
What Does It Mean?
Ultimately, the unlicensed Copilot Chat brings a boost of AI-powered productivity to Office apps, providing app-aware assistance that can streamline common tasks for all Microsoft 365 users. While its capabilities are limited compared to the full M365 Copilot, it still delivers practical value, especially for those not ready or able to invest in the full version. For many, this may be enough—at least for now. Yet, it’s clear that Microsoft is steering users toward the full benefits of the licensed tier, making this feature a likely gateway for broader adoption later.
