Updated: June 12, 2026 (January 20, 2026)
Analyst ReportM365 Copilot Adds Choice (and Risk) with Anthropic’s Claude
- Microsoft has included Anthropic’s Claude models in M365 Copilot to offer choices to users and reduce its dependency on OpenAI.
- Anthropic in M365 Copilot operates under Microsoft’s data protection safeguards, but data is still transferred outside of Azure.
- Claude models aren’t available in all features and don’t replace the default OpenAI GPT models in M365 Copilot.
- Anthropic’s Claude models are enabled by default in commercial tenancies and disabled in the EU and UK.
Microsoft has partnered with Anthropic, adding its Claude models to Microsoft 365 (M365) Copilot. Claude’s Sonnet and Opus models are popular models that rival OpenAI’s GPT models. This partnership answers customers’ demand for options to avoid vendor model lock-in and provides users with more tool choices. However, the move also appears to signify a pivot away from dependency on a single model vendor, transferring the lock-in risk to the Microsoft platform.
Claude models are included with the M365 Copilot license, although the increasing costs of AI models indicate Microsoft may change its pricing structure. They aren’t available in government or sovereign M365 tenancies.
What the Partnership Means
Beyond the immediate goals of expanding model choice and reducing reliance on OpenAI, Microsoft’s partnership with Anthropic reflects a shift in how M365 Copilot is being positioned. Rather than focusing on a single model provider, Microsoft is evolving Copilot into a model-agnostic platform that can leverage multiple AI models based on task and context.
Customers initially wanted model choice because certain models performed better for specific tasks, such as Claude models’ perceived strengths in deep reasoning, complex Excel automation, and content generation. However, as model differences narrow, the value of choosing a specific model declines, suggesting that model choice is more likely to be handled by the platform (or agents).
More significantly, Microsoft is positioning Copilot as the control layer above competing AI model providers. By supporting multiple vendor models across Copilot features, such as Researcher, agentic editing in Office, and Copilot Studio, Microsoft is shifting from dependence on a single partner to a multi-vendor platform, simplifying model choice.
Adding a second vendor also likely increases operating expenses for Microsoft, so although Claude is included in the M365 Copilot license, Microsoft may move to a tiered per-user plus usage structure, reducing cost predictability for customers.
What About Customer Data?
As of Jan. 2026, Anthropic became what’s called a subprocessor to Microsoft, meaning it’s bound by Microsoft’s Product Terms and Data Processing Addendum (DPA) and doesn’t use customer data for training its models. However, data is transferred from Azure to Anthropic’s servers in AWS or GCP datacenters located primarily in the United States, unlike OpenAI’s models operating in Azure. Consequently, Anthropic’s designation as a subprocessor to Microsoft may not be enough for some companies subject to the European Union’s General Data Protection Regulation (GDPR) or those that have strict internal data protection requirements. However, given the terms of the partnership, it’s reasonable that Microsoft eventually will extend Claude models into its European datacenters, but there’s no indication of that timeline.
Where to Find Claude
Anthropic services were enabled by default in commercial tenancies starting in Jan. 2026, except in the EU, European Free Trade Association (EFTA), and the United Kingdom (UK), where it’s disabled. Government and sovereign tenancies don’t have Anthropic (education tenancies aren’t specified). Anthropic can be enabled or disabled by admins in the M365 admin center’s Copilot settings.
M365 Copilot currently offers Claude Sonnet models for general queries and Opus models for structured queries and deep reasoning. Haiku models aren’t included. Users can choose Claude in the following places, although it’s not always clear which model is used for some features:
- Copilot Chat: Opus models can be selected in the main chat interface
- Researcher agent: Utilizes the deep reasoning of Opus models separately and in conjunction with OpenAI models for Critique (the default) and Council modes
- Agentic editing in Office: Opus models are available for agentic editing in Excel and PowerPoint with support for Word rolling out next
- Excel, PowerPoint, and Word agents: These Anthropic Office agents operate outside of the Office apps to create Office files
- Copilot Studio: Sonnet and Opus models are available for custom agents.
The following services use Claude models by default and don’t support model selection:
- AI in SharePoint: Claude models are used for the agentic layer in SharePoint
- Copilot Cowork: This agent-like feature is used in M365 Copilot.
For more details, see the sidebar “Where to Find Claude in M365 Copilot.”
Limitations and Considerations
Claude models don’t fully replace the default GPT model in M365 Copilot but continue to expand into more features, such as Copilot Chat. They also were deployed as the default models in some features like Copilot Cowork and AI in SharePoint, which don’t have model selection. If Anthropic isn’t enabled in a tenancy, these features won’t work.
Management controls are evolving. By default, after Anthropic is enabled in a tenancy, everyone with an M365 Copilot license will have access to Claude models. Controls are rolling out enabling M365 admins to assign access to Anthropic services by groups and users.
Adding model choices for M365 Copilot users can also create confusion regarding when to use which model. Organizations should provide training and guidance to their employees and update relevant governance policies.
Claude models are included with the M365 Copilot license, but the expense of a second vendor and Researcher’s dual model modes reinforce Microsoft’s signals that it will move to a tiered or fee plus usage model for M365 Copilot.
Licensing and Availability
Anthropic models are included with the M365 Copilot license for no additional cost. M365 Copilot is an add-on license for M365 subscriptions.
Enrollment in the Frontier program is required for preview features like Anthropic’s Office agents.
Directions Recommends
Pay attention to the shift in vendor lock-in from the models to the platform. Microsoft appears to be positioning itself as the platform for AI by removing dependencies on specific vendors. This may have cost ramifications to organizations as Microsoft restructures its agreements, and the company might raise prices and switch to per-user fee plus usage-cost models.
Disable Anthropic immediately if customers have any questions. Microsoft is enabling Anthropic in commercial M365 tenancies outside of the EU Data Boundary. Despite Microsoft providing data protection, data is still transferred to Anthropic. If companies have concerns, they should disable Anthropic until those questions are answered.
Verify that subprocessor status meets regulatory and data residency requirements. Although the subprocessor status provides some protection for customers, data is transferred out of Azure to Anthropic’s datacenters, mainly located in the United States. This may not meet more stringent regulatory or internal data processing requirements of some customers.
Avoid user confusion by providing education and training. Users may not know the differences between M365 Copilot models, leading to wasted time testing options and increased frustration. Training and guidance help, but the limited management controls complicate an ordered rollout of Claude.
Resources
Including Anthropic’s models in M365 Copilot was introduced in the Directions blog post “Microsoft Begins Rolling Out More Model and Agent Options for M365 Copilot and Beyond.”
Using Claude models with GPT models is discussed in the Directions report “Dual‑Model Researcher: OpenAI Meets Anthropic.”
Claude models in Microsoft Foundry is discussed in the Directions report “Foundry Gets New Name, Anthropic Models.”
Anthropic as a subprocessor for Microsoft is described in “Anthropic as a subprocessor for Microsoft Online Services” (Microsoft).
The partnership with Anthropic is announced in “Microsoft, NVIDIA and Anthropic announce strategic partnerships” (Microsoft).