Private AI vs Microsoft 365 Copilot
Copilot is built into the Microsoft 365 apps your team may already use. A private system runs on hardware you own. Here's what each does with your data, from Microsoft's own documentation.
Last updated October 2026
What Microsoft documents about Copilot
Microsoft's privacy documentation for Copilot says prompts, responses and data accessed through Microsoft Graph aren't used to train foundation models, and that Copilot only surfaces organizational data that each user has at least view permission for. Prompts and responses are processed and stored in line with your organization's other Microsoft 365 content.
Where processing happens
The same documentation says Copilot's model calls are routed to nearby data centers but can go to other regions when capacity is needed, and that customers outside the EU may have queries processed in the US, the EU or other regions. When web search is used, Copilot sends a search query to Bing.
Permissions matter either way
Because Copilot can reach whatever each user can open in Microsoft 365, Microsoft recommends using its permission models to make sure the right people have the right access. A private system needs the same care: we'll talk through which documents it should read and who should see what.
When Copilot is the better choice
- Your work already lives in Microsoft 365 and you want AI inside Word, Outlook and Teams.
- You're comfortable with Microsoft's terms for your content.
- You don't want any hardware on site.
When private AI fits better
- You want prompts and documents processed on hardware you own rather than in a provider's data centers.
- You want AI over a specific set of documents, such as policies, templates or past work, set up for that job.
- You'd like a person to set it up, show your team and keep it maintained.
At a glance
| Microsoft 365 Copilot | NexoGrid private AI | |
|---|---|---|
| Where prompts are processed | Microsoft data centers, per Microsoft | On hardware you own |
| Training on your data | Not used for foundation models, per Microsoft | No AI provider receives your data |
| What it can read | What each user can open in Microsoft 365 | The documents you choose to connect |
| Works inside Office apps | Yes | No; it's its own private assistant |
We sell managed private AI, so read this with that in mind. Facts about other products come from their own documentation, linked below, as we read it in October 2026. Products change; check the current documentation before you decide.