What is Microsoft Copilot Studio?
Microsoft Copilot Studio is a low-code tool that lets you build custom AI chatbots and assistants without writing code. You define topics, responses, and actions through a visual editor. The bots can connect to your own data sources and integrate with Microsoft 365, Teams, and Power Automate. It replaced Power Virtual Agents and is part of the broader Microsoft Copilot ecosystem.
Microsoft Copilot Studio is a low-code platform for building custom AI assistants and chatbots that connect to your data and integrate with Microsoft 365 and Power Platform.
What you can build with Copilot Studio
With Copilot Studio you create conversational AI assistants that can answer questions, guide users through processes, look up information, and take actions in connected systems. Examples include an internal HR assistant that answers employee questions about policies, a customer support bot that handles common requests, or a sales assistant that retrieves product information from your data sources.
The platform uses a visual topic editor where you define conversation paths, triggers, and responses without writing code. For questions that fall outside the defined topics, the bot can fall back to a generative AI model to provide a reasonable answer based on connected knowledge sources.
How it connects to your data
Copilot Studio supports connections to SharePoint, websites, uploaded documents, and various external data sources. You can point it at a SharePoint site containing your product documentation, for example, and it will use that content to answer user questions accurately.
It also integrates with Power Automate to trigger automated workflows from within a conversation, for instance submitting a form, creating a ticket, or sending a notification, making it more than a simple Q&A bot.
Where the bot runs
Bots built in Copilot Studio can be deployed to Microsoft Teams, SharePoint pages, websites, and mobile apps. Teams is the most common deployment target for internal bots, since employees are already there. For customer-facing bots, embedding in a website or portal is typical.
Connecting to Teams is straightforward and does not require additional infrastructure. For website embedding, you add a snippet of JavaScript to the page.
Copilot Studio vs building a custom LLM solution
Copilot Studio is the right choice when you want to build a structured conversational assistant quickly, stay within the Microsoft ecosystem, and avoid custom development. It handles hosting, security, and Microsoft 365 integration out of the box.
If you need more flexibility, such as a fully custom interface, complex business logic, or integration with non-Microsoft systems, a custom solution using the OpenAI API or another LLM provider may be more appropriate. The trade-off is development time and infrastructure management.
AI Builder is a related Microsoft tool focused on adding AI capabilities to Power Apps and Power Automate flows, rather than building conversational interfaces.
Our tip: Before building in Copilot Studio, map out the top ten questions or tasks your target users have. If those can be handled with structured topics and a knowledge source connection, Copilot Studio will get you there quickly. If the use case requires complex reasoning or deep system integration, scope that out first before committing to the platform.
Frequently asked questions
What is the difference between Microsoft Copilot Studio and Microsoft 365 Copilot?
Microsoft 365 Copilot is a built-in AI assistant embedded in Word, Excel, Teams, and other Microsoft 365 apps. It works on your existing Microsoft 365 data and cannot be customized beyond prompt configuration. Copilot Studio is a development platform where you build your own custom AI assistants from scratch. With Copilot Studio you define the topics, connect your own data sources, and control how the bot behaves. The two products complement each other: you might use 365 Copilot for personal productivity and Copilot Studio to build a customer-facing or employee-facing assistant.
What did Microsoft Copilot Studio replace?
Copilot Studio replaced Power Virtual Agents, which was Microsoft's previous chatbot-building platform. If you built bots in Power Virtual Agents, they are still accessible and functional, and Microsoft provides migration paths to Copilot Studio. The core authoring experience is similar, but Copilot Studio adds generative AI capabilities, making it easier to handle topics the bot was not explicitly trained on by falling back to an underlying LLM.
What does Copilot Studio cost?
Copilot Studio is licensed per message or per tenant, depending on the plan. There is a consumption-based model where you pay per message sent to the bot, and a capacity-based model with a fixed monthly fee for a set number of messages. For production bots with significant usage, the capacity model is usually more predictable. Check the current Microsoft pricing page for exact figures, as pricing changes regularly. A free trial is available to test the platform before committing.