Microsoft Copilot Studio (formerly Power Virtual Agents) is Microsoft's low-code platform for building AI-powered conversational agents, custom copilots, and automated workflows. With the 2024 rebrand, Microsoft repositioned the product as the central tool for extending and customizing Microsoft Copilot within enterprise environments — giving organizations control over what AI agents know, how they behave, and what actions they can take within the Microsoft ecosystem.
For the millions of organizations standardized on Microsoft 365, Copilot Studio is often the obvious starting point for AI agent deployment. It integrates natively with Teams, SharePoint, Power Platform, Dynamics 365, and Azure services, offering a low-friction path to AI agents that leverage existing Microsoft investments.
Key Features#
Generative AI Agent Builder Copilot Studio's primary interface is a low-code canvas for defining agent behavior: topics (intents and responses), knowledge sources (SharePoint, public websites, uploaded documents), and actions (Power Automate flows, HTTP requests, custom connectors). Generative mode allows agents to answer questions freely from connected knowledge sources without requiring explicit topic configuration.
Microsoft 365 and Teams Integration Agents built in Copilot Studio can be deployed directly into Microsoft Teams, SharePoint pages, and as extensions of Microsoft 365 Copilot. This deployment simplicity is a major advantage for organizations wanting internal productivity tools — the agent appears within tools employees already use daily.
Knowledge Source Connectivity Copilot Studio can connect to SharePoint sites, OneDrive, uploaded documents, public websites, and Azure AI Search indexes as knowledge sources. The generative AI layer retrieves relevant information from these sources to answer user questions, making it effective for internal FAQ and knowledge management use cases.
Power Automate Integration Actions within Copilot Studio agents can trigger Power Automate flows, enabling connections to 400+ Microsoft and third-party connectors. This integration bridges conversational AI with the broader Power Platform automation ecosystem — an agent can not only answer questions but take actions in Salesforce, ServiceNow, SAP, and other systems.
Autonomous Agent Capabilities The 2025 updates added "autonomous" capabilities where agents can proactively complete tasks without user prompting, triggered by events in Microsoft 365 services. These agents can monitor inboxes, respond to form submissions, and process requests on a schedule — moving beyond reactive chatbots toward proactive AI automation.
Pricing#
- Standalone: $200/tenant/month — includes 25,000 messages; additional messages at $0.01 each
- Microsoft 365 E3/E5 customers: May have partial access included; check your licensing
- Copilot Studio Meter: Pay-as-you-go billing available through Azure subscriptions
- Microsoft 365 Copilot add-on: Custom copilot building capabilities included at $30/user/month
Pricing is complex because it intersects with existing Microsoft licensing. Most enterprise customers should consult their Microsoft account team or licensing partner for accurate pricing based on their existing agreement.
Who It's For#
Microsoft Copilot Studio is the right choice for:
- Microsoft 365 organizations that want to build AI agents with minimal integration complexity
- Power Platform teams already using Power Automate and Power Apps who want to add conversational interfaces
- IT departments at Microsoft shops deploying Teams-based employee support agents
- Business users with some technical comfort who want to build knowledge-base copilots from SharePoint content
It is not suitable for organizations outside the Microsoft ecosystem, for teams wanting open-source flexibility, or for applications requiring AI capabilities beyond what Azure OpenAI and Microsoft's approved model list provides.
Strengths#
Zero additional infrastructure for Microsoft customers. If your organization uses Microsoft 365, deploying a Copilot Studio agent requires no new infrastructure, no additional data processing agreements, and no change management around moving data to a new vendor.
Teams-native deployment. Distributing an agent to all employees via Teams is a single configuration step. Adoption barriers are dramatically lower when the AI is accessible in the tool people use all day.
Power Platform ecosystem. The 400+ Power Automate connectors make it straightforward to build agents that do things — not just answer questions. The combination of conversational AI and action execution covers a wide range of business automation use cases.
Enterprise compliance built in. Data handling, privacy controls, and compliance certifications inherit from Microsoft's enterprise compliance posture — a meaningful reassurance for regulated industries already in Microsoft's compliance framework.
Limitations#
Microsoft ecosystem lock-in. Copilot Studio is deeply optimized for the Microsoft stack. Organizations with Salesforce, Google Workspace, or mixed environments will find integration quality drops off significantly for non-Microsoft systems.
Limited model flexibility. Copilot Studio uses Azure OpenAI models. You cannot use Anthropic Claude, Google Gemini, or open-source models. This is a constraint for organizations wanting model competition or specific model capabilities.
Pricing complexity. The intersection of tenant-level pricing, per-message fees, existing licensing, and Copilot for Microsoft 365 add-ons makes total cost of ownership difficult to estimate without Microsoft sales involvement.
Related Resources#
See the full AI Agent Tools Directory for enterprise and no-code platform options.
Related profiles: IBM watsonx for an alternative enterprise AI platform, and Moveworks for a more vertically specialized IT automation tool.
Comparisons: Microsoft Copilot Studio vs ServiceNow Virtual Agent and Copilot Studio vs Power Automate: When to Use Each.
For use case guidance, see AI Agents for Microsoft 365: Implementation Playbook and Building Internal Copilots with SharePoint Knowledge Bases.