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What is Microsoft Copilot? Differences Between M365 E3/E5 Add-on Licenses and Copilot Chat

About This Article
Based on Microsoft's official information as of September 18, 2026, this article explains the differences between Microsoft 365 E3/E5, E7, Copilot Chat, and paid Microsoft Copilot for beginners.

Verification Status: 📘 Microsoft Official Information Confirmed / Hands-on Verification Pending

Microsoft Copilot is a license that enables AI assistance in Word, Excel, PowerPoint, Outlook, Teams, and Copilot Chat using Microsoft 365 work data.

First, it is important to note thatsubscribing to Microsoft 365 E3/E5 does not automatically include paid Microsoft Copilot. According to Microsoft's licensing description updated on August 18, 2026, E3/E5 are eligible base plans to which Microsoft Copilot can be added. On the other hand, Microsoft 365 E7, which became generally available on May 1, 2026, includes Microsoft Copilot.

Key Terms to Know First

Positioning of E3/E5/E7 and Copilot

In Microsoft's current official documentation, Copilot Chat is broadly categorized intoweb-based chatandwork-based chat. Web-based Chat is included at no additional cost in eligible Microsoft 365 subscriptions and is primarily grounded in the internet. Work-based Chat is available with a Microsoft Copilot license and can be grounded in organizational data that the user has permission to access.

"Chat is Visible" is Different from "Paid Copilot"

flowchart TD
    U[Microsoft 365利用者] --> L{Microsoft Copilotライセンス}
    L -- なし --> W[Copilot Chat Web-based]
    W --> WEB[Web情報]
    W --> AG[一部Agent / 従量課金Agent]
    L -- あり --> C[Microsoft Copilot]
    C --> WORK[Work-based Chat]
    WORK --> G[Microsoft Graph / Work IQ]
    C --> APPS[Word / Excel / PowerPoint / Outlook / Teams等]

Therefore, simply seeing Copilot Chat on your screen does not mean your organization has deployed the paid Copilot.

Practical Example: Organizing Meeting Materials

Test this using a verification user assigned a paid Copilot license, with meeting materials that the user has permission to view.

この資料を、次の4列で整理してください。

- 決定事項

- 未決事項

- 担当者

- 期限

資料に書かれていない内容は推測せず「記載なし」としてください。
最後に、確認に使った箇所を示してください。

What to Look For

• Has it fabricated assignees or deadlines not present in the original text?

• Can you trace back to the source documents to verify?

• Is it returning information that you do not have permission to access?

Change One Condition

Finally, add just one condition: "Summarize this in under 200 characters for executives." Verify if only the phrasing changes while the facts remain accurate.

Copilot Does Not Magically Bypass Existing Permissions

sequenceDiagram
    participant U as 利用者
    participant C as Microsoft Copilot
    participant G as Microsoft Graph / Work IQ
    participant D as SharePoint・OneDrive等
    U->>C: 仕事データについて質問
    C->>G: 利用者コンテキストで検索
    G->>D: アクセス可能な情報を取得
    D-->>G: 許可された情報
    G-->>C: 根拠データ
    C-->>U: 回答

If sharing permissions in SharePoint or OneDrive are too broad before deploying Copilot, the issue is not that "Copilot leaked information," but ratherthat information the user already had permission to view has become much easier to find using AI. Managing permissions, sharing, and sensitive information before deployment is critical.

Cost Boundaries Also Exist for Copilot Chat Agents

According to official Microsoft documentation, while some declarative agents grounded in the public web or instructions can be used at no additional cost, agents accessing shared tenant data such as SharePoint or Graph Connectors may incur pay-as-you-go charges for Copilot Chat users. This is an area where administrators configure pay-as-you-go or capacity.

For paid Microsoft Copilot users, certain agent usage is included in the license. When deploying agents, do not assume that "all agents are free because Copilot Chat is free."

Checklist for General Users, Business Staff, and IT Admins

Pre-Deployment Checklist for Administrators

• Verify base SKUs such as E3, E5, or E7.

• Confirm that Microsoft Copilot licenses are correctly assigned to target users.

• Audit over-sharing in SharePoint and OneDrive.

• Be mindful of the scope of information users can actually access via Microsoft Graph.

• Review required controls such as Purview sensitivity labels, DLP, retention, and auditing.

• Decide whether to allow pay-as-you-go billing for Copilot Chat agents.

• Educate users that "AI output is not a primary source" and instruct them on how to verify it.

• Re-verify official information if there are differences based on region, cloud environment, or rollout status.

Common Misconceptions

"E5 includes Copilot"

In the current official licensing table, E3/E5 are plans to which the Microsoft Copilot add-on can be added. E7 is the SKU that includes Copilot.

"Copilot Chat is displayed, so paid Copilot must be assigned"

Web-based Copilot Chat is provided at no additional cost with eligible Microsoft 365 subscriptions, so its appearance alone is not a reliable indicator.

"With Copilot, we don't need to worry about access control design"

It is the opposite. Because AI makes information discovery easier, you must first organize sharing settings, access permissions, and sensitive information management.

Microsoft Official Information

• License Options for Microsoft Copilot

• Prepare for Microsoft Copilot by comparing E3, E5, and E7 license features

• Overview of Microsoft Copilot Chat

• Agents for Microsoft Copilot Chat

While E3/E5 serve as the foundation for adding Copilot,separately verifying the billing for base SKUs, Copilot Chat, paid Microsoft Copilot, and agentsis the first step in the selection process.