The news
What is Copilot Studio and what has changed in 2026?
Short answer
Microsoft Copilot Studio is Microsoft’s platform for building AI agents with little or no code: you describe the agent in natural language, give it knowledge (SharePoint, your website, your documents), add actions through connectors and publish it in Teams, Microsoft 365 Copilot or your website. You pay with Microsoft 365 Copilot licences or with credits.
In the words of Microsoft’s documentation, Copilot Studio is “a graphical, low-code tool for building agents and agent flows”. In practice it is the workshop where a company assembles its own agents to sit alongside Microsoft 365 Copilot, the paid assistant already built into Word, Excel, Outlook and Teams.
What has changed this year is the scope. The tool is no longer limited to answering questions about documents: its agents operate websites and desktop applications, hand work to one another, choose between models from different vendors and are governed from a central console, Agent 365. The latest addition, announced on 7 October 2026 on the official product blog, lets you generate apps by describing them in natural language, for now in preview.
- 1 Sept 2025
“Messages” are renamed Copilot Credits
Microsoft changes the billing unit for agents without changing the quantity per pack or the pay-as-you-go rate (Microsoft Learn).
- Nov 2025
Ignite 2025: Microsoft 365 Copilot Business, Agent 365 and Work IQ
Microsoft announces a licence for companies with fewer than 300 users, at $21 per user per month from December, and a console for governing agents (Microsoft News).
- 9 Mar 2026
Agent 365 and Microsoft 365 E7, available on 1 May
Agent 365 is priced at $15 per user. Microsoft also introduces Copilot Cowork, developed with Anthropic, as a research preview (Official Microsoft Blog).
- 26 May 2026
Computer-using agents generally available
They can operate websites and desktop applications through their interface. The new workflow designer starts rolling out to early-access environments (Microsoft blog).
- Jun 2026
Claude Sonnet 5 and GPT-5.5 Chat as the primary model
Both become generally available and connecting several agents enters preview (Microsoft Learn). At Build 2026, on 2 June, Microsoft launches Microsoft IQ, a context layer for agents that also reaches this platform (Official Microsoft Blog).
- 29 Jul 2026
More than 30 million paid seats
Microsoft reports more than 30 million Microsoft 365 Copilot seats and almost 40 million agents registered in Agent 365 (fiscal fourth-quarter results).
- 7 Oct 2026
Apps in Copilot Studio, in preview
Alongside them come a Microsoft-managed environment to host them, in preview, and the integration with Foundry IQ, now generally available (Microsoft blog).
My reading: Microsoft has turned its agent tool into the front door to agents for any company that already pays for Microsoft 365. And the next milestone is close: Microsoft Ignite runs from 17 to 20 November 2026.
How it works
How do you build agents in Copilot Studio?
You create an agent by describing it in natural language and finishing it on a visual canvas with five building blocks. A simple case needs no coding, although serious ones need someone who understands data and permissions. According to the official documentation, the blocks are these:
- Instructions. What the agent does, in what tone and what it must never do.
- Knowledge. Company documents and data: SharePoint, your website, files or tables in Dataverse, the Power Platform database.
- Tools. Prebuilt or custom connectors, external APIs and MCP servers to query or update other systems.
- Triggers. The agent can wait to be asked or start on its own when an event happens, such as a new email, or on a schedule.
- Channels. Teams, Microsoft 365 Copilot, your website, a mobile app or any channel supported by Azure Bot Service.
MCP (Model Context Protocol) is an open standard for connecting AI to other systems. The platform supports it once you turn on generative orchestration: every tool an MCP server exposes becomes available to the agent (Microsoft Learn). I explain it in the article on the Model Context Protocol and how it connects AI to your systems.
Copilot Studio agents: the quick builder or the full experience
There are two ways to build Copilot Studio agents. The agent builder in Microsoft 365 Copilot (Agent Builder, which Microsoft also calls Copilot Studio Lite) is for question-and-answer agents for you or your team. Copilot Studio, the full portal, is for departmental or customer-facing agents.
| Criterion | Agent builder (Lite) | Full Copilot Studio |
|---|---|---|
| Who it is for | One person or a small team | A department, the whole company or external customers |
| What it does | Questions and answers over Microsoft 365 data, with the user’s permissions | Multi-step flows, approvals, branching and autonomous actions |
| Connections | Microsoft 365 content | Prebuilt and custom connectors, APIs and MCP |
| Where it is published | Microsoft 365 Copilot | Teams, Microsoft 365 Copilot, web and other channels |
| Lifecycle | Quick creation of lightweight agents | Versions and development, test and production environments |
| Managed in | Microsoft 365 admin centre | Power Platform admin centre |
Source: Microsoft Learn. An agent created in the quick builder can later be copied to the full portal without starting from scratch, so it makes sense to start there and move a Copilot Studio agent to the full portal only when it needs actions and flows.
One product, several names
Pricing
How does Copilot Studio licensing work, and what does it cost?
Microsoft 365 Copilot costs £23.10 ($30.00 in the US) per user per month, paid yearly, and Copilot Studio is paid for separately with credits: £153.80 ($200.00) a month for a pack of 25,000. These are list prices before tax from Microsoft’s UK and US websites, checked on 12 October 2026 (enterprise, business and Copilot Studio; US: Copilot Studio and business).
On Microsoft’s comparison table, that credit pack appears as the Copilot Studio license itself, while users with Microsoft 365 Copilot get internal agent use as part of their own licence.
Copilot Studio pricing: licences and credits
| Criterion | Price (UK · US) | What it includes | Who it is for |
|---|---|---|---|
| Microsoft 365 Copilot Chat | No extra cost | Business AI chat; your organisation’s agents are billed by usage | Users with an eligible Microsoft 365 plan |
| Microsoft 365 Copilot Business | £16.10/user/month yearly (£13.80 on promotion); £19.32 monthly · $21.00 yearly ($18.00 on promotion); $25.20 monthly | Copilot in Word, Excel, PowerPoint, Outlook and Teams; Researcher and Analyst agents | Up to 300 users with a Microsoft 365 business plan |
| Microsoft 365 Copilot | £23.10 · $30.00/user/month, yearly | The same, for enterprises; includes building agents in the standard Copilot Studio environment | Companies with an eligible Microsoft 365 plan |
| Copilot Studio credit pack | £153.80 · $200.00/month for 25,000 credits | Agents in any channel and premium connectors | Customer-facing agents or unlicensed users |
| Pay as you go | Based on credits consumed, billed in arrears | The same, billed through an Azure subscription | Variable usage or pilots |
| Pre-purchase plan | Save up to 20% | Annual pool of prepaid credits | High, predictable consumption |
The promotional Copilot Business price is for existing Microsoft 365 business customers, with an annual commitment, for the first year only and valid from 1 July to 31 December 2026, according to the pricing page. In Spain the same products are listed in euros (for example, €26 per user per month for Microsoft 365 Copilot and €173.30 for the credit pack), so check your own market’s page before budgeting.
How credits are spent
Everything an agent does consumes a fixed number of credits, according to the billing rates table on Microsoft Learn, updated on 1 October 2026:
- Classic (scripted) answer: 1 credit.
- Generative answer: 2 credits.
- Agent action, such as creating a task: 5 credits.
- Answer grounded in the company’s Microsoft 365 data: 10 credits.
- Agent flow actions: 13 credits per 100 actions.
- Document processing: 8 credits per page.
£23.10
per user per month for Microsoft 365 Copilot, paid yearly, before VAT ($30.00 in the US)
Microsoft UK and US, 12-10-2026
£153.80
a month for a pack of 25,000 Copilot Studio credits ($200.00 in the US)
Microsoft UK and US, 12-10-2026
+30 M
paid Microsoft 365 Copilot seats reported by Microsoft in July 2026
Microsoft, results 29-07-2026
A worked example with assumptions: a customer-facing agent with 3,000 conversations a month, four generative answers and one action in each, uses 3,000 × (4 × 2 + 5) = 39,000 credits. That is two packs: £307.60 ($400.00) a month before tax. If your employees have a Microsoft 365 Copilot licence, their use of internal agents under their own identity does not consume credits, subject to fair-use limits.
Credits do not roll over
Individuals
Is there a free Copilot? What does Copilot cost for personal use?
Yes: there is a free Copilot for individuals, limited and subject to available capacity. If you want more usage, Copilot comes with the Microsoft 365 home subscriptions. These are the prices on Microsoft’s UK page for individuals and US page, checked on 12 October 2026:
| Criterion | UK price | US price | People | Copilot |
|---|---|---|---|---|
| Free Copilot | £0 | $0 | 1 | Limited version, subject to capacity |
| Microsoft 365 Personal | £84.99/year or £8.49/month | $99.99/year or $9.99/month | 1 | More usage than the free version and Copilot in the Office apps |
| Microsoft 365 Family | £104.99/year or £10.49/month | $129.99/year or $12.99/month | Up to 6 | The same as Personal, for the subscription owner only |
| Microsoft 365 Premium | £189.99/year or £18.99/month | $199.99/year or $19.99/month | Up to 6 | Extensive usage and agentic AI for research and analysis, for the owner only |
| Microsoft 365 Pro | £94.99/month | $99.99/month | Up to 6 | Highest usage limits and agentic AI, monthly billing only, for the owner only |
Microsoft 365 Basic includes no AI features. And in the Family, Premium and Pro plans, the AI is not shared with the other members. For reference, in Spain the Personal, Family and Premium plans cost €99, €129 and €219 a year.
My advice: keep personal and business separate
Analysis
When is a custom AI agent better than Copilot Studio?
When the agent depends on data, logic or volumes that live outside Microsoft 365. If your company works in Teams, Outlook and SharePoint and your employees already have licences, Copilot Studio is hard to beat for speed. It also builds on Microsoft 365 Copilot, which inherits Microsoft 365 permissions, labels and retention policies, and Microsoft says it does not use your prompts or its responses to train models (Microsoft).
Copilot Studio is great if you live in Microsoft 365. The trouble starts when your business lives elsewhere.
These are the signals that, in my experience designing custom AI agents for businesses, tip the balance:
- Your key data sits outside Microsoft. A legacy ERP with no API, an in-house database or industry-specific software. Microsoft’s tool connects through connectors and MCP, but if the connection has to be built anyway, the rest of the agent weighs less in the decision.
- You need your own logic. Models that score customers, prioritise collections or flag risks using your business rules. That is analytics, not conversation.
- The volume is high and external. A customer-facing agent always pays for credits, and the cost grows with every conversation.
- You want to choose the model and the hosting. The platform stores data in the Azure region you choose, with exceptions such as the Teams or Facebook integrations (Microsoft Learn). A custom agent can use a European model with the data kept in the EU.
| Criterion | Copilot Studio | Custom agent |
|---|---|---|
| Best fit if | Your team lives in Microsoft 365 and already has licences | Your key data and processes sit outside Microsoft |
| Speed to start | High: a simple first agent is quick to set up | Medium: it has to be designed and connected |
| Business logic | Flows, approvals and visual rules | Any logic, including your own scoring models |
| Cost | Per-user licence or credits per action | Initial development plus model usage and hosting |
| Models | Those Microsoft offers (OpenAI, Anthropic and others in testing) | Whichever you choose, European ones included |
| Lock-in | Tied to Microsoft 365 and Power Platform | Portable, if designed on standards such as MCP |
It is not either-or
Microsoft is not alone. Google is pushing Gemini Enterprise for building agents with Google, Salesforce has Agentforce for companies that live in its CRM and OpenAI sells ChatGPT Business with its own agents. The rule is the same in all four cases: the best agent is the one that lives where your data is.
Tool
Calculator: what would your Copilot Studio agent cost?
Enter your usage and the calculator gives you the credits per month and the cost with packs, with pay-as-you-go and, for an internal agent, with Microsoft 365 Copilot licences. Choose UK or US list prices; every price is an editable assumption, so replace it with the one in your contract.
For a finer calculation, Microsoft offers an official agent usage estimator and recommends adding a 10 to 20% margin to the estimate.
Impact
What does Copilot Studio mean for your business?
It means that building an agent is no longer a months-long project if you work with Microsoft 365, but cost and governance have to be decided from day one. The impact varies by area:
LeadershipHigh impact
You have to choose between per-user licences and pay-per-use credits, and that cost model decides which agents are profitable. An independent AI consultancy for businesses helps you choose without relying on the vendor’s pitch.
IT and dataHigh impact
Governance is now your job: environments, permissions, allowed connectors and an agent registry. Since July 2026, every new agent automatically gets an identity in Microsoft Entra (Microsoft Learn).
Sales and customer serviceMedium impact
A customer-facing agent on your website or by voice is viable, but every conversation costs credits. Measure the cost per conversation before opening it to the public.
MarketingLow impact
You gain productivity with Copilot Chat. And if your customers ask Microsoft Copilot about your sector, your brand needs to show up: that is visibility in ChatGPT, Copilot and Google.
Action
What should you do now about Copilot Studio?
Start with a specific process and with your licences, not with the tool. These are the steps for this week and this quarter:
This week: take stock of your licences
Note who has Microsoft 365 Copilot, which Microsoft 365 plan you are on and whether you qualify for the Copilot Business promotion, which ends on 31 December 2026.
This week: pick a process and map it
A repetitive, measurable task, such as answering internal questions or sorting emails. Use the MAPA method to map and automate processes with AI and note how long it takes today.
This month: try the agent builder
Build a question-and-answer agent over SharePoint with the quick builder. If it works, copy it to the full portal to add actions and flows.
This quarter: work out the real cost
Use the calculator above and the official estimator with your volume. Compare licences, packs and pay-as-you-go with a 10 to 20% margin.
This quarter: decide where the agent lives
If everything is in Microsoft 365, stay with Copilot Studio. If your data or your volume sits elsewhere, consider a custom agent or a combination of both.
If you want practical material to start with, the free resources include the MAPA template and the checklist “Can AI read your website?”. And if you are looking for someone to help you decide, I am José Galán, Search & AI Visibility consultant and AI agent designer.
Key points
- Copilot Studio builds agents in Microsoft 365 from natural language, knowledge, actions and channels such as Teams and Outlook.
- Microsoft 365 Copilot costs £23.10 ($30.00) per user per month; a pack of 25,000 credits, £153.80 ($200.00) a month (before tax, 12 October 2026).
- Internal agents used by licensed employees do not consume credits; customer-facing agents always do.
- For personal use there is a limited free Copilot and plans from £84.99 ($99.99) a year.
- A custom agent pays off when data sits outside Microsoft, when you need your own logic or when external volume is high.
FAQ
Frequently asked questions about Copilot Studio
What is Microsoft Copilot Studio?
Microsoft Copilot Studio is Microsoft’s graphical, low-code tool for building AI agents and agent flows. You describe the agent in natural language, give it knowledge sources such as SharePoint or your website, add actions through connectors or MCP servers and publish it in Teams, Microsoft 365 Copilot, your website or other channels. It is paid for with Microsoft 365 Copilot licences or with Copilot Credits.
What is the difference between Microsoft Copilot, Microsoft 365 Copilot and Copilot Studio?
Microsoft Copilot is the assistant for personal use, with a limited free version and a fuller one included in Microsoft 365 Personal, Family and Premium. Microsoft 365 Copilot is the business licence that brings AI into Word, Excel, Outlook and Teams using your organisation’s data. Copilot Studio is the tool for building your own agents, which extend Microsoft 365 Copilot or are published in other channels.
How much does Copilot Studio cost?
As of 12 October 2026, Microsoft’s UK site lists a pack of 25,000 Copilot Credits at £153.80 a month, and its US site at $200.00. You can also pay as you go, billed in arrears through an Azure subscription, or pre-purchase credits and save up to 20%. If your employees have Microsoft 365 Copilot, at £23.10 ($30.00) per user per month paid yearly, their use of internal agents is included, subject to fair-use limits.
Is there a free Copilot for businesses?
Yes, with caveats. Microsoft 365 Copilot Chat is included at no extra cost in eligible Microsoft 365 business plans, and the agent builder in Microsoft 365 Copilot can be used free of charge for agents that only draw on the web. Agents your organisation builds on its own data are billed by usage, except for users with a Microsoft 365 Copilot licence.
How much does Copilot cost for personal use?
There is a free version of Copilot for personal use, limited and subject to available capacity. For more usage, in the UK Microsoft 365 Personal costs £84.99 a year or £8.49 a month; Microsoft 365 Family, £104.99 a year or £10.49 a month; and Microsoft 365 Premium, £189.99 a year or £18.99 a month. In the US the same plans cost $99.99, $129.99 and $199.99 a year. In Family and Premium, the AI features are for the subscription owner only. Prices checked on 12 October 2026.
Can Copilot Studio agents connect to non-Microsoft systems?
Yes. Copilot Studio agents use prebuilt or custom connectors, can call external APIs and, with generative orchestration turned on, connect to MCP (Model Context Protocol) servers to use their tools and resources. The practical limit shows up with legacy systems that have no API, very specific business logic or large volumes of conversations, where a custom AI agent usually pays off.
When is a custom AI agent better than Copilot Studio?
When your key data lives outside Microsoft 365, when the agent needs its own logic, such as models that score or prioritise, when it serves many external customers and every conversation consumes credits, or when you want to choose the model and where the data is hosted. If your team works in Teams and SharePoint and already has Microsoft 365 Copilot licences, Copilot Studio is usually the fastest route.
References
Sources
Checked and verified on 12 October 2026.
- Microsoft Learn, Copilot Studio overview (updated 7 May 2026).
- Microsoft Learn, Copilot Studio licensing (3 August 2026).
- Microsoft Learn, Copilot Credits billing rates and management (updated 1 October 2026).
- Microsoft Learn, What is new in Copilot Studio (updated 6 October 2026).
- Microsoft Learn, Agent Builder in Microsoft 365 Copilot vs. Copilot Studio (checked 12 October 2026).
- Microsoft Learn, Extend your agent with Model Context Protocol (26 August 2026).
- Microsoft Learn, Data locations in Copilot Studio (30 April 2026).
- Microsoft Learn, Agent usage estimator (3 August 2026).
- Microsoft UK, pricing for Copilot Studio, Microsoft 365 Copilot for business, enterprise and individuals (checked 12 October 2026).
- Microsoft US, pricing for Copilot Studio, Microsoft 365 Copilot for business and individuals (checked 12 October 2026).
- Microsoft, Microsoft 365 Copilot and Microsoft Copilot Studio (checked 12 October 2026).
- Microsoft Copilot Blog, Build apps, workflows, and agents together (7 October 2026).
- Microsoft Copilot Blog, What is new in Copilot Studio: May 2026 (26 May 2026).
- Official Microsoft Blog, Introducing the First Frontier Suite built on Intelligence + Trust (9 March 2026).
- Official Microsoft Blog, Microsoft Build 2026 (2 June 2026).
- Microsoft News, Microsoft Ignite 2025: Empowering the Frontier Firm with AI agents and Copilot (19 November 2025).
- Microsoft Investor Relations, FY2026 fourth-quarter earnings call (29 July 2026).
This article was created with the help of AI and reviewed by José Galán. I take great care over every post and every translation, but the odd mistake can still slip through. If you find one, write to me: you will be helping me improve.
Custom AI agents
Copilot Studio or your own agent? Let’s decide with your data.
I look at where your data lives, which process you want to solve and how much volume you have, and tell you whether Copilot Studio is enough or whether a custom AI agent that analyses, prioritises and explains its reasoning is worth it. Data kept in the EU, and you approve every important action.
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