Copilot vs ChatGPT: which should a small business pay for?

I'm Managing Partner of a two-office law firm in East Sussex with around 30 people. I built its AI-assisted marketing workflow, which runs automatic checks before a person approves anything. I don't sell software, so I've no reason to push you towards either tool.

What is the difference between Copilot and ChatGPT?

Copilot is Microsoft's AI assistant. The paid version works inside Word, Excel, Outlook and Teams and can draw on your own emails, files and meetings. ChatGPT is OpenAI's assistant, a separate app you open in a browser, on a desktop or on your phone. It connects to other tools, but it doesn't live inside them.

The names are the confusing part. Microsoft is part-way through renaming its products: its documentation now calls the paid work product “Microsoft Copilot” and the included chat “Microsoft Copilot Chat”. The free personal app is also called Microsoft Copilot. What separates them is the account you sign in with.

One practical check: look at what your staff sign in with. Someone using the free Copilot app on a personal account is on consumer terms, even if your business pays for Microsoft 365.

Where does each one work?

Paid Copilot works inside the Microsoft 365 apps your team already has open, so you can ask it to summarise a Teams meeting or a long email thread in place. ChatGPT works in its own window. You paste text in, upload files, or connect apps such as SharePoint, Outlook or Google Drive.

According to Microsoft's Copilot overview, the paid licence gives you:

• Word: drafting, rewriting and summarising documents.
• Excel: analysing data and suggesting formulas and charts.
• PowerPoint: a first draft of a deck from a prompt or a document.
• Outlook: drafting emails and summarising long threads.
• Teams: meeting summaries, transcripts and a list of actions.

It can do this because the licence connects Copilot to Microsoft Graph, which holds your emails, files, chats and calendar. Copilot only shows each person what they already have permission to open.

Copilot Chat, the included version, is mainly grounded in the web. It can work with a file you upload or, in Outlook and Teams, with the email or chat you have open. Without the paid licence it can't search across your company's files. On some plans, staff may also see a basic Copilot inside Word and Excel, subject to available capacity.

How do the business plans protect your data?

Both business versions promise not to use your prompts and files to train their AI models, and both offer a data processing agreement. The big difference is with personal accounts: Microsoft's free Copilot app and ChatGPT's personal plans can use conversations for training unless you switch that setting off.

Microsoft calls its set of promises enterprise data protection. It covers encryption, your existing permissions and sensitivity labels, and your retention policies. It applies when staff sign in with their work account, with no extra set-up.

OpenAI's equivalent is on its enterprise privacy page. It says business data is encrypted at rest and in transit and isn't used for training by default.

Either business plan is a sensible base. Neither makes your use lawful on its own, because UK GDPR still applies to what you put in. My guide on whether ChatGPT is safe for business explains what that means and what never to paste in.

What is each one good at?

Copilot is at its strongest on work that already lives in Microsoft 365: your inbox, your Teams meetings, your spreadsheets and your documents. ChatGPT is at its strongest as a general assistant for drafting, research and working through a problem, especially if your business uses a mix of software rather than one suite.

Which should my business choose?

Start with where your team works and what you already pay for. If you're on Microsoft 365 Business Basic, Standard or Premium, you already have Copilot Chat, so try that first with work sign-ins. Pay for Copilot when people live in Outlook and Teams. Pick ChatGPT Business when you need a flexible assistant across other tools.

Is Microsoft 365 Copilot worth it for a small business?

It can be, if your team spends its day in Microsoft 365 and you test it on real jobs first. Try a handful of licences with the people who handle most email, meetings and documents, measure the time saved, then decide. Buying it for everyone on day one risks paying for licences nobody opens.

For businesses with up to 300 users on Microsoft 365 Business Basic, Standard or Premium, Microsoft sells Microsoft Copilot Business. If you've searched for Microsoft Copilot for business, this is usually the licence you mean. It has the same features as the full Copilot add-on.

Two things to know before you buy. It's an annual commitment, billed monthly or yearly, with no month-to-month option. And if you already bought the standard add-on, you can't switch until that commitment ends.

I won't quote prices, because they change. Check Microsoft's Copilot pricing page and ChatGPT's pricing page on the day you buy, and note whether the figure includes VAT.

Can you use Copilot and ChatGPT together?

Yes, and it can make sense. If you're on Microsoft 365 Business Basic, Standard or Premium, Copilot Chat is already included, so you might add ChatGPT Business only for the few people who draft or research all day. The one rule that matters is that every AI tool used for work runs on an account your business controls.

Copilot Chat is built on OpenAI's models, but Microsoft says your data isn't passed to OpenAI or used to train its models. So paying for both isn't paying twice for the same thing. You're paying for two different places to work.

Common pitfalls

• Paying for Copilot before tidying permissions. It can surface anything a person is allowed to open, including folders that should have been locked down years ago.
• Letting staff carry on with personal accounts. You can't see or control what's in them, and personal plans can train on chats by default.
• Buying licences for everyone at once. Copilot Business is an annual commitment, so start small and add people as the value shows.
• Trusting the first answer. Both tools can be wrong while sounding sure of themselves. A person checks anything that goes to a customer.
• Choosing on features, not jobs. A long feature list means nothing if it doesn't touch the tasks that eat your week.

What to do next

1. List five jobs that eat your week. Emails, quotes, meeting notes, reports, whatever they are. That's your test.
2. Check what you already have. If you're on Microsoft 365 Business Basic, Standard or Premium, ask staff to open Copilot Chat signed in with their work account.
3. Run a short trial on real work. Two to four weeks, a few people, the same five jobs. Note the time saved and the mistakes caught.
4. Write down simple rules. Which account to use, what can't go in, and who checks the output. My AI policy template for UK businesses is a good place to start.
5. Then buy only what you need. Check the vendor's pricing page on the day, and add licences as people prove the value.

How I can help

This is what my AI training for small business teams is for. I'll look at what you already pay for, help you choose between Copilot and ChatGPT, and train your team on their own work, with simple rules on what's safe to share.

If you'd rather start with the bigger picture, my AI readiness assessment shows where your team's time goes before you spend anything on licences.

Questions people ask

Is Copilot just ChatGPT with a Microsoft badge?

Not quite. Microsoft says Copilot Chat is built on OpenAI's ChatGPT models, and some licensed Copilot features can also use Anthropic's models. But it's a separate product with its own terms. Microsoft says your Copilot data isn't available to OpenAI or used to train OpenAI's models.

Is Copilot Chat free for businesses?

It's included at no extra cost with eligible Microsoft 365 subscriptions, as long as staff sign in with their work account. It's mainly grounded in the web, though. Using Copilot across your emails, files and meetings needs a paid Copilot licence.

Does Copilot read all of my company's files?

Only with a paid licence, and only what each person already has permission to open. Microsoft says Copilot respects your existing Microsoft 365 permissions. So check who can see what in SharePoint and OneDrive before you switch it on.

Can ChatGPT work with Outlook and SharePoint?

Yes. ChatGPT has apps that connect to Outlook email and calendar, SharePoint, Microsoft Teams and Google Drive, among others. In a ChatGPT Business workspace, an admin decides which apps are available. It still works in its own window rather than inside Outlook or Word.

Is ChatGPT Plus OK for a small business?

It's a personal plan. It suits one person, but chats can train OpenAI's models unless the user switches that off, and your business gets no admin control or data processing agreement. For a team working with customer information, ChatGPT Business is the plan built for the job.

Which is safer for customer data, Copilot or ChatGPT?

On their business plans, both promise not to train on your data and both offer a data processing agreement. The bigger risk is staff using personal accounts. My guide to whether ChatGPT is safe for business covers what UK GDPR means and what never to paste in.

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