Comparing Microsoft 365 Copilot and ChatGPT Enterprise

Given the surprisingly small number of paid Microsoft 365 Copilot seats (15 million) revealed by Microsoft in their FY26 Q2 results, it is unsurprising that Microsoft should start to compete more openly with OpenAI, especially for Microsoft 365 tenants. The latest initiative is a comparison between Microsoft 365 Copilot and ChatGPT Enterprise with the tagline that “not all AI is built for work.”

OpenAI has tools to allow customers to connect SharePoint Online and OneDrive for Business to ChatGPT. The temptation therefore exists for customers to conclude that something like OpenAI’s SharePoint connector is all that’s needed to leverage AI within a Microsoft 365 tenant.

Quite rightly, Microsoft disagrees, and they prove their point by describing some important areas where ChatGPT can’t deliver what Copilot can. Let’s examine what Microsoft says.

Teams Meetings

Microsoft says that Copilot “reasons over Teams meetings.” Well, Copilot reasons over the transcript generated by Teams meetings (even if the transcript is not retained after the meeting) to generate outputs like summaries and action items. The processing of Teams transcripts is a good example of how AI can effectively process a bounded set of information to generate value.

Because it’s dependent on the accuracy of the transcript, Copilot doesn’t get everything right in its summaries but overall, it does a good job. It’s worth noting that the Facilitator agent does much the same job of creating summaries and noting important points for Teams chats.

If you don’t want to use Microsoft 365 Copilot with Teams, a set of third-party notetaking apps exist that can connect to the audio stream of Teams meetings to generate their version of transcripts and summaries.

Entra ID

Microsoft says that Copilot “knows your organization.” If the organizational reporting structure is recorded accurately in Entra ID, Copilot can use that structure to understand how individuals are connected within the organization. Copilot maps the organizational information into the semantic index to enhance its search capabilities.

The organizational data available in Entra ID is available through the Microsoft Graph, and it wouldn’t take much for OpenAI to include some code to retrieve the information and use that knowledge to create something like the Org Explorer. This isn’t the same as the semantic index, but the basics are there. The challenge for OpenAI would then be how to maintain an accurate picture of Entra ID structures for its enterprise customers.

Sensitivity Labels and Encrypted Files

Microsoft says that Copilot “enforces sensitivity labels” to keep “sensitive data protected.” It’s true that ChatGPT cannot process files protected by sensitivity labels (with encryption) because ChatGPT has no ability to open those files. Sensitivity labels use Azure Rights Management as the basis for its protection, and ChatGPT has no way to prove that it has the right to open protected files on behalf of a user with rights.

Microsoft 365 Copilot depends on the DLP policy for Copilot to tell it not to process certain emails and files protected by sensitivity labels. Proving that bugs can undermine any software, a recent bug allowed Copilot to process sensitive emails and include their content in its responses.

Microsoft doesn’t mention Restricted Content Delivery (RCD), an incredibly important feature that stops Copilot using content from complete SharePoint Online sites. The OpenAI connector simply uploads SharePoint files to process and doesn’t comply with RCD blocks.

SharePoint Pages

Microsoft notes that ChatGPT can’t process SharePoint pages. Because Copilot can process any information available to it via Microsoft Search, it can process SharePoint pages like news posts.

But Wait, There’s More

I guess Microsoft could have also pointed to its nascent agent ecosystem (aka Agent 365) and all that’s implied by that initiative, the addition of the Anthropic models, agents like Researcher, automatic summaries for Word documents, and so on.

The point here is that Microsoft 365 Copilot leverages much more of the information stored in Microsoft 365 workloads than ChatGPT can get to. Whether that’s worth the $360/year (list) per user is a decision that individual companies must make.

So much change, all the time. It’s a challenge to stay abreast of all the updates Microsoft makes across the Microsoft 365 ecosystem. Subscribe to the Office 365 for IT Pros eBook to receive insights updated monthly into what happens within Microsoft 365, why it happens, and what new features and capabilities mean for your tenant.