What happens to your data in Microsoft Copilot?  | Arc

AI is changing the way we work – and fast. Microsoft Copilot, the AI assistant built unto Microsoft 365 apps like Word, Excel, Outlook, SharePoint and Teams, is one of the most talked about tools in this space and there’s a huge amount of features designed to make your working life easier and your team more productive.

But, as with any AI that interacts with your organisation’s data, a key question comes up: what actually happens to your data when you use Copilot, and how can you keep sensitive data safe? 

In this blog, we’ll explore how Copilot works with your data, what Microsoft is doing to protect it, and how tools like Microsoft Purview can help you manage governance and compliance along the way. 

Data privacy: what Microsoft delivers

Microsoft has taken a strong stance on data boundaries when it comes to Copilot.

Here are just a few of the ways it helps to protect your data: 

• Your data stays within your M365 tenant: it’s not used to train AI models behind Copilot, and it’s not shared with other organisations. 
• Real-time access and no permanent storage: Copilot brings in the data it needs when you request something. It doesn’t store or remember your data afterwards. 
• Same security standards as the rest of M365: this means enterprise-grade identity controls, encryption, compliance certifications, and more. 

Managing governance with Microsoft Purview 

Security is crucial, but it’s only one piece of the puzzle. Governance matters just as much, especially when AI is involved, and that’s where Microsoft Purview comes in. 

Purview is Microsoft’s suite of data governance and compliance tools; it works behind the scenes to help you manage what Copilot can access, how it uses that data, and how your organisation stays compliant with internal policies and regulations. 

Here’s how Purview helps with Copilot governance: 

• Data classification and sensitivity labels: with Purview, you can label documents and emails based on sensitivity (such as ‘confidential’ or ‘internal use only’. Copilot respects these labels and follows any restrictions attached to them. 
• Data Loss Prevention (DLP): you can create policies that warn or block users when sensitive data (like personal or financial information) is being used in ways that could pose a risk. 
• Audit logs and monitoring: all Copilot interactions are logged, and you can monitor them using Purview’s auditing tools. This helps with transparency and compliance reporting. 
• eDiscovery and legal hold: if you ever need to perform an investigation or legal discovery, Copilot-generated content is covered just like any other M365 content. 

Want to hear more about how Purview can support your Copilot governance?

Talk to our experts

How does Copilot use my data? 

When you interact with Copilot – say, asking it to draft an email or summarise a document – it doesn’t just pull responses from the air. Instead, it pulls context from your Microsoft 365 data using Microsoft Graph. 

The data it pulls from includes: 

• Emails 
• Calendar events 
• Chat messages 
• OneDrive and SharePoint files 
• Meeting transcripts 

Here’s the good news: Copilot only shows you content that you already have permission to see and does not give users access to anything they wouldn’t normally be able to open in M365. 

Tips for a secure, responsible Copilot rollout

Here are a few best practices to keep in mind: 

• Label your content properly using Purview’s information protection tools. 
• Set up DLP policies before rolling out Copilot across your organisation. 
• Start with a pilot group to test governance settings before scaling. 
• Train users on what Copilot can and cannot access. 
• Use auditing tools to keep an eye on how Copilot’s being used. 

Microsoft has a lot of potential – it’s fast, smart, and deeply integrated into the tools that many of us use every day. But with great AI comes great responsibility and, thankfully, Microsoft has built Copilot with privacy and security in mind. 

If you’re interested in rolling out Copilot within your organisation but don’t know where to start, get in touch with our expert team who can help you analyse your environment and set up a roadmap for AI success.