Microsoft Copilot Uses Your Data by Default, Users Must Opt Out, Dagens Reports

Microsoft’s decision to make data collection the default setting for Copilot has sparked a wave of concern among enterprise customers who rely on Microsoft 365 for sensitive workflows. According to Dagens, the AI assistant streams user content—including emails, documents, and chat logs—to Microsoft’s servers unless the user actively disables the feature in the admin console. The policy applies across the entire Copilot suite, from Word and Excel to the newer “Copilot Vision” preview that can analyze open browser tabs, a capability highlighted by The Register. The default opt‑in means that, without deliberate action, corporations may be exposing proprietary information to Microsoft’s training pipelines, a risk that runs counter to the privacy assurances that were part of the product’s original marketing.

The opt‑out process, as described by Dagens, requires administrators to toggle a setting in the Microsoft 365 compliance center and then propagate the change across all tenant users. This multi‑step procedure can be cumbersome for large organizations with thousands of accounts, especially when the change must be coordinated with existing governance policies. The Register has noted that similar misconfigurations in Microsoft Power Pages have already led to accidental data exposure, underscoring the broader challenge of managing privacy controls in a sprawling SaaS ecosystem. For firms that have already integrated Copilot into daily operations, the need to audit and potentially roll back data sharing settings adds an unplanned operational burden.

From a market perspective, the default‑on model may be a strategic move to accelerate the AI’s learning curve. By ingesting a wider swath of real‑world usage data, Microsoft can refine Copilot’s large‑language models more quickly, a benefit that could translate into stronger product performance and a competitive edge over rivals such as Google’s Gemini and Anthropic’s Claude. However, the trade‑off is heightened scrutiny from regulators and privacy‑focused customers. Dagens points out that the policy runs afoul of the expectations set by the European Union’s GDPR framework, where “explicit consent” is typically required before personal data is processed for secondary purposes. If regulators interpret the default setting as a violation, Microsoft could face fines or be forced to redesign the onboarding flow.

Analysts observing the episode note that the controversy arrives at a pivotal moment for Microsoft’s AI ambitions. The company has positioned Copilot as a cornerstone of its broader “AI for the enterprise” strategy, betting that deep integration with Office will lock in recurring revenue from its massive 300‑million‑user base. Yet the privacy backlash could erode trust among the very customers that constitute the bulk of that revenue. The Register’s coverage of Copilot Vision’s “tab‑judging” feature illustrates how quickly the product line is expanding, and each new capability carries its own data‑handling implications. If enterprises perceive the default data collection as a hidden cost, they may delay or scale back deployments, potentially slowing the revenue ramp that Microsoft expects from its AI push.

In response, Microsoft’s product team has issued a brief statement confirming that the data collected is used solely for “service improvement and safety monitoring,” and that customers can “opt out at any time” via the admin portal. The company also promises that any data retained for model training will be anonymized and stripped of personally identifiable information, though the details of that process were not disclosed in the Dagens report. Until clearer guidance and more transparent controls are provided, the onus remains on IT leaders to audit their Copilot configurations and weigh the convenience of AI assistance against the risk of inadvertent data exposure.