Microsoft Copilot Default Data Sharing Behavior

When you first start using Microsoft Copilot in Microsoft 365 apps like Word, Excel, or Teams, the tool sends certain data to Microsoft by default. This data includes parts of your prompts, the text or content Copilot reads from your document, and the generated responses. The purpose of this data collection is to improve Copilot’s accuracy, fix bugs, and train its underlying models. Many business users are unaware that this sharing is enabled by default and that they can control it. This article explains what data Copilot shares by default, why it does so, and how to change the setting for your organization or your own account.

What Data Copilot Shares by Default and Why

When you use Copilot in a Microsoft 365 app, it sends three categories of data to Microsoft’s servers. The first category is your prompt text, which is the question or instruction you type into the Copilot pane. The second category is the context from your document, email, or chat that Copilot reads to generate a response. This context can include sentences, paragraphs, or entire documents depending on what you select or what the app sends automatically. The third category is the response Copilot generates, which Microsoft uses to evaluate quality and correctness.

Microsoft states that this data collection is required for basic functionality because Copilot processes prompts on its cloud servers. However, the company also uses this data for model training and improvement by default. This means that your prompts and the document content Copilot sees may be reviewed by Microsoft engineers or used to retrain future versions of the model. Microsoft does not use the data to identify individual users or to market products, but the data is stored and processed on Microsoft servers.

The default data sharing applies to all Microsoft 365 subscriptions that include Copilot, including Copilot for Microsoft 365, Copilot Pro, and the free Copilot in Windows. For enterprise tenants, the default setting is controlled by the global admin through the Microsoft 365 admin center. For individual accounts, the setting is managed by the user in the Copilot pane’s privacy menu.

What Data Is Excluded from Default Sharing

Microsoft does not share the following data by default: your Microsoft 365 account credentials, your file metadata such as file names and folder paths, your calendar event details, and your contact list. Copilot also does not share the content of files you do not open or reference in your prompt. The data sharing is limited to the content that Copilot actively processes to generate a specific response.

How Microsoft Uses the Shared Data

Microsoft uses the shared data for three main purposes. First, to improve the accuracy of Copilot responses by analyzing where the model gives incorrect or incomplete answers. Second, to detect and fix bugs where Copilot fails to generate a response or crashes. Third, to train new versions of the underlying large language model. Microsoft publishes transparency reports that describe how data is used, but the data itself is not publicly accessible.

How to Change the Default Data Sharing Setting

You can change the default data sharing behavior at two levels: the organization level for all users in a tenant, and the individual user level for a single account. The steps below cover both methods.

For Microsoft 365 Admins: Disable Data Sharing for the Entire Organization

1. Open the Microsoft 365 admin center
   Sign in with a global admin or SharePoint admin account. Go to admin.microsoft.com.
2. Navigate to Org settings
   In the left navigation, click Settings then Org settings. Scroll down to find the Copilot entry.
3. Open the Copilot settings page
   Click Copilot to open the settings panel. You will see several tabs including Data sharing, Data collection, and Privacy.
4. Turn off data sharing for model improvement
   Click the Data sharing tab. Uncheck the box labeled Allow Microsoft to use your organization’s Copilot data to train and improve models. Click Save.
5. Turn off data collection for diagnostics
   Click the Data collection tab. Set the toggle for Send diagnostic data to Microsoft to Off. Click Save.

After you save these changes, Copilot will still process prompts on Microsoft servers to generate responses. However, Microsoft will not use the prompt content, document context, or responses for training or improvement. The setting applies to all users in the tenant within 24 hours.

For Individual Users: Disable Data Sharing for Your Account

1. Open any Microsoft 365 app with Copilot
   Launch Word, Excel, PowerPoint, or Outlook. Open a document or email.
2. Open the Copilot pane
   Click the Copilot icon in the top ribbon or press Alt + I on Windows. The Copilot pane opens on the right side of the window.
3. Access the settings menu
   In the Copilot pane, click the three-dot menu icon at the top right. Select Settings from the dropdown menu.
4. Disable data sharing
   In the Settings panel, click Data privacy. Toggle the option Send diagnostic data to Microsoft to Off. Close the settings panel.

This setting only affects your account on the current device. If you use Copilot on another device, you must repeat the steps there. The change takes effect immediately for all Copilot sessions in the current app.

Common Misconceptions About Copilot Data Sharing

Turning Off Data Sharing Disables Copilot

This is false. When you disable data sharing for model improvement or diagnostic data, Copilot continues to work normally. It still sends your prompt and document context to Microsoft servers to generate a response. The only difference is that Microsoft does not store or use that data for training. The core functionality of Copilot remains unchanged.

Data Sharing Applies Only to Enterprise Tenants

This is also false. The default data sharing applies to all Copilot users, including those with personal Microsoft accounts. Individual users must change the setting in the Copilot pane as described above. Enterprise admins can change the setting for all users at once.

Microsoft Can Access All Files in OneDrive

Microsoft does not access files that you do not open in a Copilot session. The data sharing only includes the content that Copilot actively reads to respond to a specific prompt. Files stored in OneDrive but not referenced in a prompt are not shared.

Copilot Data Sharing: Default vs Opted-Out Behavior

Item	Default Behavior	After Opting Out
Prompt text sent to Microsoft	Yes, used for processing and training	Yes, used for processing only
Document context sent to Microsoft	Yes, used for processing and training	Yes, used for processing only
Generated response sent to Microsoft	Yes, used for quality evaluation and training	Yes, used for quality evaluation only
Data stored for model training	Yes, indefinitely	No
Diagnostic data sent to Microsoft	Yes, includes crash reports and performance data	No
Copilot functionality affected	No	No

The table shows that the only difference between the default and opted-out state is whether Microsoft uses the data for training and diagnostics. The core processing still requires sending data to Microsoft servers. If you want to block all data transmission, you must disable Copilot entirely in the Microsoft 365 admin center or uninstall the Copilot app from your device.

Conclusion

You now know what data Copilot shares by default and how to change that behavior. For enterprise admins, the key setting is in the Microsoft 365 admin center under Settings > Org settings > Copilot > Data sharing. For individual users, the setting is in the Copilot pane under Settings > Data privacy. You can keep Copilot working while preventing Microsoft from using your data for model training. As a next step, review your organization’s data handling policy and decide whether to apply the opt-out setting globally. For advanced control, consider using Microsoft Purview compliance policies to audit Copilot data usage across your tenant.