Copilot Studio
Copilot Studio (formerly Power Virtual Agents) is Microsoft's low-code platform for building custom AI agents and extending Microsoft 365 Copilot. You define topics, connect data sources, and deploy your agent to Teams, websites, or other channels — without writing traditional application code. In April 2026, Microsoft significantly expanded Copilot Studio's governance and agentic capabilities.
What You Can Build
Custom Copilots
Build standalone AI agents scoped to your business — an HR helpdesk bot, a customer service agent, an internal knowledge assistant.
M365 Copilot Extensions
Extend Microsoft 365 Copilot with your own topics, skills, and data sources — your custom knowledge appears inside the M365 Copilot experience.
Intelligent Workflows
Connect agents to Power Automate flows, Microsoft Dataverse, SharePoint, and external APIs to take multi-step actions in response to user requests.
Generative Answers
Upload documents or connect to SharePoint — Copilot Studio automatically grounds responses in your content without manually authoring every topic.
How It Works
Building in Copilot Studio follows a topic-based authoring model, now enhanced with a natural-language Agent Builder:
- Describe your agent — use the Agent Builder to describe what you want in natural language; Copilot Studio generates the initial topics and conversation flows
- Connect knowledge sources — add SharePoint sites, uploaded files, public websites, or dataverse tables as knowledge bases for generative answers
- Define topics — author specific conversation paths for predictable Q&A, form collection, or action triggering when generative answers aren't appropriate
- Add actions — connect Power Automate flows, HTTP connectors, or Microsoft Graph API calls to take real-world actions
- Test and deploy — built-in test panel; deploy to Microsoft Teams, SharePoint, a website widget, or other channels
April 2026 Updates
Agent governance
Admins can view, manage, and control all agents deployed within the tenant from a central governance dashboard — what agents exist, who created them, what data they access.
Security posture visibility
New agent security visibility: which agents have access to sensitive data, external connectors, or broad permissions — surfaced in the Microsoft 365 admin center.
Intelligent workflows
Agents can now trigger multi-step Power Automate flows automatically as part of agentic task completion, not just on explicit user request.
Generative answers improvements
Better citation accuracy, improved chunking from SharePoint sources, and support for structured document grounding (tables, lists).
Pricing
| Tier | Cost | Included |
|---|---|---|
| M365 Copilot users | Free / unlimited | Unlimited Copilot Studio messages for internal workflows when using a licensed M365 Copilot tenant |
| Pay-as-you-go | $200 / month | 25,000 messages per tenant per month; additional messages billed at overage rates |
| Copilot Studio standalone | Varies | Available as an add-on for organizations without M365 Copilot; pricing through Microsoft CSP/EA agreements |
For most enterprises already on M365 Copilot, Copilot Studio is effectively free for internal agents — the cost is absorbed in the M365 Copilot per-seat license.
Copilot Studio vs Azure AI Foundry
Both platforms let you build AI agents, but they target different audiences:
- Copilot Studio — low-code, business users and IT admins, M365 ecosystem-native, deploy to Teams in minutes, visual authoring
- Azure AI Foundry — pro-code, developers and AI engineers, full SDK access, custom models, fine-tuning, any cloud deployment target
Copilot Studio agents can call Azure AI Foundry models and services under the hood — they're complementary, not competing platforms.
Checklist: Do You Understand This?
- Copilot Studio is a low-code agent builder — formerly Power Virtual Agents, now AI-first
- Generative answers: connect SharePoint or documents, no manual topic authoring needed for Q&A
- Pricing: free/unlimited for M365 Copilot licensed orgs; $200/month (25k messages) standalone
- April 2026: agent governance dashboard + security posture visibility added
- Copilot Studio = business users + Teams/M365 ecosystem; Azure AI Foundry = developers + full code control