Welcome to the July 2025 Update for Microsoft 365 Copilot!

Each month, we bring you the latest improvements and features designed to help Microsoft 365 admins stay up-to-date. Whether you're managing productivity tools or exploring new AI capabilities, Copilot continues to evolve to support your users in the apps they rely on every day.

Here’s what’s new this month:

Introducing the Copilot Control System New Reports & Controls in the Microsoft 365 Admin Center

Starting in late July (with a broader rollout in September), admins will get access to a powerful new Agents Usage Report—designed to give you deeper insights into how Copilot agents are being used across your organization.

Here’s what you’ll be able to track:

• Total active agent users and total active agents
• Breakdown of usage by licensed vs. unlicensed users
• Segmentation by publisher type:
• Agents created by individual users
• Agents built by your organization
• Agents developed by Microsoft
• Agents from Microsoft partners

• Detailed usage data for each user, agent, and user-agent pair

This feature is available in preview in late July and rolling out in September.

Flexible Access to SharePoint Agents — Now with Pay-As-You-Go!

Good news for organizations looking for more flexibility: you can now enable SharePoint agents using a pay-as-you-go (PAYG) model—right from the Microsoft 365 admin center.

Here’s how it works:

• Navigate to Copilot > Billing & usage > Pay-as-you-go services
• Enable the SharePoint agents PAYG option
• Set up departmental billing policies to manage costs and access

This update means users who don’t have a full Microsoft 365 Copilot license can still benefit from SharePoint agents—making it easier to scale access based on team needs and budget.

This feature became available in July, so you can start exploring it now!

Smarter Budgeting for Copilot Pay-As-You-Go Services

Microsoft 365 Copilot’s pay-as-you-go (PAYG) billing model just got a major upgrade—giving organizations even more control over how AI-powered features are accessed and paid for.

Now, even users without a full Copilot license can tap into its capabilities, while admins keep spending in check with custom budgets and department-level controls.

Here’s what’s new:

• Set budget thresholds for each billing policy
• Customize alerts to notify teams when they’re nearing limits
• Choose reset frequencies to match your financial planning
• Monitor and enforce spending by department or user group

This update makes it easier to manage costs, promote accountability, and ensure your teams get the AI tools they need—without overspending.

Available now, rolled out in July!

Meet Copilot Search — Your Smarter, AI-Powered Search Assistant

Say goodbye to traditional search and hello to Copilot Search—a new unified experience that helps users not just find information, but truly understand and act on it.

Powered by Microsoft Graph, organizational context, and natural language intelligence, Copilot Search turns your everyday queries into meaningful results. It’s like having a personalized assistant that connects the dots across Microsoft 365 and even third-party systems.

Here’s what makes it stand out:

• Delivers task-oriented results tailored to each user’s context
• Bridges the gap between search and action, helping users move faster
• Offers a new admin management experience in the Microsoft 365 admin center
• Let’s AI admins configure features like curated bookmarks and acronym definitions to enhance relevance and usability

This feature rolled out in July and is ready to elevate how your organization searches and works.

Easier Taskbar Pinning for Microsoft 365 Copilot

Good news for IT teams: pinning Microsoft 365 Copilot to the Windows taskbar across your organization is now simpler and more flexible.

This update introduces a dedicated setting in the Copilot Control System within the Microsoft 365 admin center, making it easy to enable taskbar pinning without affecting other configurations.

Here’s what you can expect:

• A tenant-wide opt-in option for seamless deployment
• Minimal disruption to existing settings
• Users still have the freedom to pin or unpin the app as they prefer

The setting is available in the Copilot Control System section of the Microsoft 365 admin center. This feature rolled out in July.

Deeper Insights with Enhanced Group Drilldown in Copilot Dashboard

For leaders and managers, understanding how teams are using Copilot just got more powerful. The Copilot Dashboard now includes an enhanced group drilldown feature—giving you visibility not only into your direct reports, but also into indirect groups one level below your organizational structure.

Here’s what this means for you:

• View and compare Copilot adoption metrics across multiple teams
• Analyze performance and engagement side by side within your reporting chain
• Gain a clearer picture of Copilot’s impact across your organization

This feature rolled out in July and is ready to help you lead with data-driven clarity.

Stronger Data Protection for Agents with Embedded Knowledge Sources

Security and compliance just got a boost in Copilot Studio. Now, when you create an agent using embedded files or knowledge sources, it automatically inherits the highest sensitivity label among those files—ensuring your most confidential data stays protected.

For example: If even one file is labeled “Confidential,” the entire agent will operate under that classification—enforcing Microsoft Purview policies consistently across all interactions.

Here’s what admins can now do under Agents & connectors:

• Filter and view agents using embedded knowledge sources
• Review agent metadata, including sensitivity labels and file containers
• Take lifecycle actions like blocking or deleting agents to maintain control

By applying the most restrictive label across all agent activity, organizations can confidently prevent data leakage and stay compliant with internal and regulatory standards.

This feature rolled out in June. and is ready to support your governance strategy.

Greater Transparency and Control with Microsoft Purview for Copilot and Agents

Microsoft Purview is stepping up to help organizations use AI responsibly—protecting sensitive data while still unlocking the full potential of Copilot.

Here’s what’s new:

• Transparent Web Search IT admins now get deeper visibility into how Copilot interacts with the web. In addition to existing tools like Audit and eDiscovery, you can now:
• See the exact web search terms Copilot used.
• View the original user prompt, Copilot’s response, and any supporting resources
• Access all this data in Activity Explorer within Microsoft Purview Data Security Posture Management (DSPM) for AI
• This added transparency helps organizations monitor AI activity more closely, ensuring responsible use and stronger data governance.

Rolled out in July, this feature is ready to support your security and compliance goals.

New Filter for Copilot Web Search in Activity Explorer

Keeping tabs on how Copilot uses web content just got easier. A new filter in Activity Explorer lets IT admins quickly zero in on interactions where Copilot performed a web search.

Here’s what this means for you:

• Easily identify and review Copilot responses that include web search activity
• Monitor how external content is being used to support answers
• Ensure everything aligns with your organization’s data security policies

This streamlined view helps reinforce responsible AI use and strengthens oversight across your environment.

Rolled out in July, this feature is now available in Microsoft Purview DSPM for AI.

Learn more about web queries in DSPM for AI activity explorer. 

Data Loss Prevention (DLP) Now Available for Microsoft 365 Copilot and Agents

As of June, DLP for Microsoft 365 Copilot and Agents is now generally available—giving organizations powerful new controls to safeguard sensitive information.

Key Capabilities:

• Restrict Access: Prevent Copilot from accessing, processing, or referencing files with designated sensitivity labels
• Proactive Alerts: Notify security teams when potential data exposure requires attention
• Simulation Mode: Safely test DLP configurations before full deployment, ensuring precision and confidence

This release strengthens your data protection strategy by integrating Copilot into your existing DLP framework—helping ensure AI-powered productivity doesn’t compromise compliance.

Learn more about securing AI interactions with Data Loss Prevention for Microsoft 365 Copilot and Agents.

This feature rolled out in June.

• Microsoft has expanded its Data Loss Prevention (DLP) policies for M365 Copilot to include emails with sensitivity labels, adding an extra layer of protection. Just like with labeled files, Copilot will now be restricted from accessing, processing, or referencing any emails marked with sensitivity labels. This enhancement is designed to safeguard sensitive information and is currently available in Public Preview, with broader rollout happening throughout August.

• IT administrators now have access to a dedicated Copilot page within Data Security Posture Management (DSPM) for AI, offering a clear overview of how data is being used across Microsoft 365 Copilot. This new page provides valuable insights into usage trends and potential risks, along with customized reports and recommendations to help govern Copilot responsibly. Designed to simplify oversight and strengthen data protection, this feature became available in July.

• With the growing use of Microsoft 365 Copilot, the risk of sensitive information being unintentionally exposed—whether in prompts, responses, or shared files—is increasing, often due to incorrect access permissions. To help address this, DSPM for AI now includes Oversharing Assessments for OneDrive for Business, expanding beyond its original focus on SharePoint. This tool helps organizations pinpoint where too much information is being shared and provides clear guidance on how to fix it, making it easier to protect data and maintain user confidence. The feature is currently in Preview and will begin rolling out in September.

User capabilities

Voice interaction in Copilot Chat on mobile

Starting in August, Microsoft 365 Copilot users on iOS will be able to interact with Copilot using their voice, making mobile productivity even more seamless. This new voice feature in the Copilot mobile app offers a faster, more natural way to get things done—whether you're catching up between meetings, thinking out loud, or tackling complex tasks on the move. It’s designed to keep your workflow smooth and your hands free, so you can stay focused wherever you are. This feature is rolling out first to Microsoft 365 Copilot users in August.

Enhancements to conversation history, access, and grounding sources in Copilot Chat:

Copilot Chat is getting smarter with new enhancements to conversation history, making it easier for users to revisit and organize past chats. Soon, you’ll be able to access your history directly from the Chat section in the left navigation of the Microsoft 365 Copilot app, and filter it by workflow, Agent used, or whether content was added to a Page. These updates are designed to improve context recall and help you quickly find the conversations that matter most, streamlining your work and boosting productivity. These features are rolling out in August.

Starting in August, Copilot Chat is streamlining conversation history by unifying it across all Microsoft apps. Previously, users had to remember which app a conversation took place in to find it again—but now, all past chats are gathered in one place. This makes it much easier to search, revisit, and continue conversations without missing a beat, helping users stay organized and productive across their workflow. This feature is rolling out in August.

As a trusted Microsoft Gold Partner, Ctelecoms can help Saudi businesses get the most out of Microsoft 365 Copilot. We provide guidance and support to help you adopt Copilot in a way that works well for you. This includes helping you improve productivity, make your workflows more efficient, and strengthen data security and governance.

Take a look back at last month's highlights using the following links:

Microsoft 365 Copilot May 2025 Productivity and AI Updates

What's New in Microsoft 365 Copilot-March 2025

Copilot Takes Center Stage with AI-Powered Productivity and Security