How secure is Microsoft Copilot?

If you’re thinking about rolling out Microsoft 365 Copilot at your organisation, security is probably one of your biggest questions. Fair enough. You’re handing an AI tool access to your emails, customer data, business-critical files, and sensitive information. That warrants some careful thought. That said, Copilot is designed to respect your existing access controls and security settings. It doesn’t have free rein over all your files and only works with what you can already see and use.

Let’s break down how Microsoft Copilot works with your data, what it can (and can’t) access, potential security risks, and how you can use Copilot confidently while protecting sensitive information.

 

How does Microsoft Copilot access your data?

Microsoft 365 Copilot connects to your organisational data through Microsoft Graph, which is how Copilot accesses content and context in your Microsoft 365 tenant. This means Microsoft Copilot can pull information from your documents, emails, calendars, Teams chats, and meeting notes, but only if you have permission to access that data.

Microsoft Copilot runs under your user account via Microsoft Entra ID. You have to be signed in, and Copilot uses your identity and existing permissions to fetch information. It cannot override your permissions or access anything you couldn’t access yourself.

It uses Microsoft Graph to search for relevant content, combines that with context like the email thread you’re in, and feeds that into a large language model to generate its answers. Importantly, all of this happens within Microsoft’s secure cloud using Azure OpenAI services, not the public OpenAI chat. Your data stays inside the Microsoft 365 ecosystem.

 

What data can Microsoft Copilot see?

Microsoft 365 Copilot can only see the information that you, as a user, have access rights to. It does not gain any special or expanded permissions. If you have access to a certain SharePoint site or OneDrive folder, Copilot can retrieve content from there. But if you ask Copilot for something in a file you have no rights to, it won’t produce it.

The scope depends on your role and the data you normally can access. This includes content you own or that’s shared with you in OneDrive, SharePoint, Teams, and Outlook. Copilot also respects compliance configurations, such as Microsoft Purview sensitivity labels. If a document is encrypted or restricted by a Microsoft Purview sensitivity label, Microsoft Copilot will only show content from it if your account is authorized under that label’s policy.

 

Does Microsoft Copilot train on your data?

Microsoft has made it clear that any prompts you enter, the data Copilot retrieves, and the responses it generates are not used to improve or train the underlying foundation AI models. Your files and conversations aren’t becoming part of ChatGPT’s knowledge base. The large language model powering Microsoft 365 Copilot is a fixed, pre-trained model. Copilot just uses it to generate answers based on your query and the relevant data it pulled at that moment.

During a single Microsoft Copilot session, the tool may keep context of the conversation to provide better answers. But this context is temporary and user-specific. Copilot doesn’t retain memory of your requests once the session is over.

In Copilot Chat with enterprise data protection, prompts and responses are logged and can be retained for audit and eDiscovery, depending on your organisation’s settings. However, if you use consumer ChatGPT or consumer Copilot, your conversations may be used to improve the models unless you opt out in the privacy or data controls settings.

Does Microsoft Copilot protect my business/personal data?

Microsoft has built Microsoft Copilot on the same security foundation that protects the rest of Microsoft 365. That means encryption, access controls, compliance standards, and all the security measures you’re already relying on for your emails and files. Your data gets encrypted both when it’s sitting in storage and when it’s moving between systems. Microsoft uses enterprise-grade encryption and supports broad compliance offerings and certifications like General Data Protection Regulation (GDPR) and ISO 27001, and it supports HIPAA compliance where applicable. For organizations in the European Union, Copilot aligns with the EU Data Boundary safeguards for EU users.

 

How does Copilot handle web searches?

When you ask Copilot something that benefits from current information, it might send a search query to Bing (when web search or web grounding is enabled). This is worth understanding. The query sent to Bing isn’t your full prompt. Copilot generates a short web search query made up of a few words from your prompt, and it avoids transmitting the full prompt unless the prompt itself is very short.

That said, these web queries are sent to the Bing search service, with user and tenant identifiers removed, and they’re governed by the commitments Microsoft applies to generated web queries. 

For most organisations, this is fine. But if you’re working with highly sensitive information, you can turn off web search entirely through admin policies.

 

What are the biggest Microsoft Copilot security risks for organisations?

You might have heard stories about Copilot surfacing sensitive documents to people who shouldn’t see them. These stories are usually true. But the fault almost never lies with Copilot. It’s about :

Oversharing and over-permissive sharing settings.

If your permissions are too loose, Microsoft 365 Copilot could reveal confidential information to users who shouldn’t have it. In the old days, we relied on “security by obscurity.” Maybe you have a folder called “2024 Redundancy Plans” saved on a public team site. Nobody looks at it because nobody knows it is there. It is hidden in a sub-folder of a sub-folder. You are safe because of bad organization. Copilot destroys security by obscurity. If a user asks, “What are the redundancy plans for 2024?”, Copilot will instantly scan everything that user has access to. If that folder was accidentally left open to “Everyone” five years ago, Copilot will find it. 

Insider risk

If an employee decides to misuse their access, Microsoft Copilot could accelerate how quickly they collect sensitive info. A disgruntled staffer with broad access might ask Copilot to summarise salary information and get a quick answer.

Account compromise

Microsoft Entra ID controls sign-in and permissions, so MFA, conditional access, and privileged access controls need to be in place.  Microsoft Copilot can amplify the damage a single compromised account might do.

Prompt injection

These involve hiding malicious instructions in documents or emails that Copilot might process. In theory, an attacker could manipulate Copilot into searching for business sensitive data or exfiltrating information. Microsoft has built multiple layers of defence against this. They use content filtering to detect prompt injection attempts, including jailbreak attempts and what they call externalised prompt injection attacks. They also apply markdown sanitization, malicious prompt classifiers, and session hardening. Is it perfect? No system is.

 

Has Microsoft Copilot had any data breaches?

In 2024, security researchers discovered a vulnerability in Copilot Studio (CVE-2024-38206) that allowed authenticated attackers to access Microsoft’s internal infrastructure. Microsoft patched it, and there’s no evidence of customer exploitation, but it shows that AI tools introduce new attack surfaces. Another research team demonstrated how attackers could use prompt injection to manipulate Copilot into exfiltrating data. They built a tool called LOLCopilot that could alter Copilot’s behavior undetected. The U.S. House of Representatives banned congressional staff from using Microsoft Copilot in early 2024 due to security concerns about sensitive data leaking to non-approved cloud services. Microsoft said it had a roadmap of AI tools intended to meet federal government security and compliance requirements.

 

Is Copilot safe enough for my business?

The technology itself is secure, but Microsoft Copilot is as safe as the environment you run it in. 

Microsoft has built strong protections around encryption, access controls, and compliance, but the tool will surface whatever data your authorized users have access to. That’s both its strength and its risk.

Before deploying Microsoft Copilot, take time to audit your permissions, classify your data, and set up proper guardrails. If your data governance is solid, Copilot becomes a productivity tool that respects your security boundaries. If your data governance is messy, Copilot will make those problems visible fast.

 

Need help getting Copilot ready?

If you need guidance on implementing Copilot securely or want to ensure your Microsoft 365 setup is ready for AI, get in touch with Zenzero. We can help you deploy Microsoft Copilot safely and make sure you’re getting the most out of it.