Most companies asking "Claude or Copilot?" already have both. Copilot Chat comes with Microsoft 365, and someone in finance is often paying for Claude Pro on a company card. The seat prices are close enough that price rarely decides it. What decides it is where your data lives, which terms it travels under, and who controls the settings. And since Microsoft added Anthropic's models to Copilot, the choice is no longer either-or.
What is the difference between Claude and Copilot?
Microsoft Copilot is Microsoft's AI assistant built into Microsoft 365, working inside your tenant's permissions, labels and retention rules, while Claude is Anthropic's AI assistant with its own apps and admin controls, which reaches into Microsoft 365 through a connector and Office add-ins. For a company, the comparison is between plans: Microsoft 365 Copilot (Business or enterprise) against Claude Team or Claude Enterprise.
This guide is for the COO, IT lead or operations lead choosing a company standard for 20 to 1,000 people. Prices and terms are as of October 2026, from each vendor's own pages. We sell neither product and partner with neither vendor.
A naming note: Microsoft has renamed Microsoft 365 Copilot to Microsoft Copilot, and Microsoft 365 Copilot Chat to Microsoft Copilot Chat, though its price pages still use the old names. When people search "Claude vs Copilot" they sometimes mean GitHub Copilot, the coding assistant. That's a developer decision with its own trade-offs, and this article doesn't cover it.
How much does Claude cost compared with Copilot?
Per seat, Claude Team and Microsoft 365 Copilot Business cost about the same: $20 and $21 a user a month on annual plans, as of October 2026. The real difference is what each price sits on top of, and what's billed by usage.
| Plan | Price per user a month | What else you pay | Who it's for |
|---|---|---|---|
| Microsoft Copilot Chat | Included | An eligible Microsoft 365 subscription | Every Microsoft 365 user |
| Microsoft 365 Copilot Business | $21 annual ($18 first year if bought 1 July to 31 December 2026), $25.20 monthly | An eligible Microsoft 365 Business plan | Existing Microsoft 365 Business customers |
| Microsoft 365 Copilot (enterprise) | $30 annual, $31.50 monthly with an annual commitment | A qualifying Microsoft 365 plan | Larger organisations on enterprise plans |
| Claude Team, standard seat | $20 annual, $25 monthly | Nothing else required | 2 to 150 people |
| Claude Team, premium seat | $100 annual, $125 monthly | Nothing else required | Heavy users (5x the usage of a standard seat) |
| Claude Enterprise | $20 annual, 20-seat minimum | Usage billed at API rates | Larger or regulated organisations |
Three details change the sums:
- Copilot sits on top of Microsoft 365. If you already pay for Microsoft 365, the add-on is the whole extra cost. Microsoft also says "some advanced AI features use usage-based billing on top of the license fee".
- Claude Team comes with credit. Each Team plan includes "up to $500 per month in pooled API credits", and you can mix standard and premium seats.
- Claude Enterprise is priced by use. The $20 seat is the floor. What you pay above it depends on which models people use and how much, so budget from a pilot, not from the seat price. Admins can set spend limits for users and the organisation.
For a 50-person company on annual plans, that's $12,600 a year for Copilot Business at the regular price ($10,800 at the first-year discount) against $12,000 for Claude Team on standard seats. Neither number includes the Microsoft 365 licences you probably already pay for.
How do Claude and Copilot handle company data?
Both keep business data out of model training by default, but Copilot works inside your Microsoft 365 tenant under Microsoft's data terms, while Claude works under Anthropic's commercial terms and reaches Microsoft 365 from outside.
Microsoft Copilot
Microsoft covers Copilot and Copilot Chat with its Data Protection Addendum and Product Terms, acting as a data processor. It says prompts and responses get "the same contractual terms and commitments" as email in Exchange and files in SharePoint. Copilot "respects your identity model and permissions, inherits your sensitivity labels, applies your retention policies, supports audit of interactions", though the exact controls depend on your plan. Prompts, responses and Microsoft Graph data "aren't used to train foundation models".
One exception is worth knowing. When Copilot searches the web, the short query it sends to Bing falls under the Microsoft Services Agreement, with Microsoft as an independent controller, not under your enterprise terms.
Claude Team and Enterprise
Anthropic says that "by default, we will not use your inputs or outputs from our commercial products" to train its models, and Team and Enterprise are commercial products. Chats stay in the product until a user deletes them, and deleted chats leave Anthropic's back-end within 30 days. Enterprise adds custom data retention controls; Team doesn't have them. If a user rates a chat with the thumbs buttons, Anthropic keeps that conversation for up to five years, and an owner can switch rating off for the whole organisation.
When Claude reaches into Microsoft 365, it does so on the user's behalf. Anthropic's connector documentation says "all access is delegated": Claude can read or change only what the user's own account can. It can search SharePoint, OneDrive, Outlook and Teams, and it can send mail, edit calendars, create files and post in Teams only if your administrators turn on write actions. A Microsoft Entra Global Administrator has to grant consent before anyone in the tenant can connect.
The Office add-ins (Claude for Excel, PowerPoint, Word and Outlook) need one more check. Each keeps a user's 50 most recent conversations per Office app on their device, including the document and email content Claude read. Anthropic says there is "no administrator-configurable retention window" and the add-ins don't inherit the custom retention settings you set for your organisation.
Personal accounts are the real gap
Claude Free, Pro and Max are consumer plans. On those, Anthropic uses chats to improve its models if the user chooses to allow it. That choice belongs to each employee, not to you, and none of your admin controls apply. If staff are already using Claude on personal accounts for work, the decision you're making is really whether to bring that use under a company plan, Claude or Copilot, and close the personal accounts.
Can you use Claude inside Microsoft Copilot?
Yes: Anthropic is a Microsoft subprocessor, and Microsoft turns Anthropic's models on by default for most commercial customers outside the EU, EFTA and UK, so many Copilot users can already pick Claude.
Microsoft says Anthropic's models are available in Copilot, Researcher, Copilot Studio, Power Platform and Copilot in the Microsoft 365 apps. Used this way, Claude runs under Microsoft's Product Terms and Data Protection Addendum and is covered by enterprise data protection. There are three catches:
- Some models come on different terms. Models labelled "Anthropic models with Data Retention" store data with Anthropic, outside your Microsoft agreement. Microsoft names Claude Fable 5 as one. They must always be switched on separately.
- Location matters. Anthropic's models in these Microsoft products are currently excluded from the EU Data Boundary, and they're off by default for customers in the EU, EFTA and UK.
- It's an admin setting you may not have chosen. An AI Administrator or Global Administrator controls it under Copilot settings, in "AI providers operating as Microsoft subprocessors", and can limit it to chosen users or groups.
For many companies this settles the question. If you want Claude's models but need your Microsoft labels and retention to apply, Claude inside Copilot gives you both. If you want Anthropic's own apps and admin console, such as the Claude desktop app and Cowork, you need a Claude plan.
Claude Team vs Enterprise: which do you need?
Claude Team covers 2 to 150 people with single sign-on and central admin, and Enterprise adds the controls an IT or compliance team usually asks for: SCIM, audit logs, the Compliance API, role-based access and custom data retention.
The size limit decides it for some companies: above 150 people, it's Enterprise. Below that, it comes down to what your IT and compliance teams need to see and control.
Team includes single sign-on, domain verification, central billing, usage analytics, admin controls for connectors, and Claude for Microsoft 365 and Outlook. Enterprise adds domain capture, SCIM, audit logs, the Compliance API, role-based access, custom data retention, network-level access control and IP allowlisting, user and organisation spend limits, and a HIPAA-ready offering. If you handle patient data, Enterprise is the only Claude plan with a HIPAA-ready offering, and you still need the right agreement in place before anyone uses it.
Which should your company choose?
Choose Copilot if your work and data already live in Microsoft 365 and you need your existing labels and retention to apply. Choose Claude if you want Anthropic's apps and controls, or work spread across tools beyond Microsoft. Many companies will end up with Copilot as the standard and Claude's models enabled inside it.
| If this describes you | Lean towards |
|---|---|
| Most work happens in Word, Excel, Outlook and Teams | Microsoft Copilot |
| Your compliance depends on Purview labels and retention policies | Microsoft Copilot |
| You want Claude's models but under Microsoft's terms | Copilot, with Anthropic models enabled |
| Your team works across many tools, not only Microsoft | Claude Team or Enterprise |
| Staff already use Claude Pro for work and like it | Claude Team, then close personal accounts |
| You need audit logs, SCIM or custom retention for Claude | Claude Enterprise |
| You're in the EU or UK and need the EU Data Boundary | Check Anthropic models are off, or confirm the terms first |
Be careful with head-to-head claims. Microsoft publishes a comparison saying Claude "does not provide the same tenant-level enforcement as Microsoft 365" and "did not enforce Microsoft Purview policies". It's Microsoft's own marketing, labelled "simulated video", recorded between April and June 2026. The point about data controls is consistent with what Anthropic documents about its add-ins. The task-by-task demonstrations are worth testing yourself.
The way to test is the same for any tool. In our framework, a tool earns its place on the approved list by proving itself on real work, with a named owner and a stop condition. Our free lesson on approved tools shows how to set that list, and the lesson on the two-stage proof shows how to run the trial so the result means something.
How to choose a standard
01 · List what staff already use
Find every AI assistant in use, including personal Claude and ChatGPT accounts and the Copilot features already switched on in Microsoft 365. This tells you what the standard will replace and who to ask about it.
02 · Map where your work and data live
Note which data sits in Microsoft 365, which sits elsewhere, and which classes of data must never leave your tenant. Our lesson on the data map shows how. The map decides how much Copilot's tenant controls are worth to you.
03 · Check your Anthropic setting in Microsoft 365
Open the Microsoft 365 admin center, go to Copilot settings and find "AI providers operating as Microsoft subprocessors". Decide who should have Anthropic's models, and whether any "with Data Retention" models should be allowed. This gives you a third option to test in the next step.
04 · Test both on the same real task
Pick one recurring task from a team that does it every week, and give a few people each option for two weeks. Measure the time saved and the quality of the output against the same standard. You end up with evidence instead of preferences.
05 · Write the standard into your policy and close the gaps
Name the approved tool, the plan and what data may go into it, and give it an owner. Then retire personal accounts used for work, the way our lesson on keep, replace or retire describes. Our free AI usage policy generator drafts the rules for staff.
Picking a tool is the smaller half of deploying AI. The larger half is choosing the work it goes into and owning it once it runs. If you'd like help running the trial and writing the standard, our AI implementation team does that, starting from a consultation.
What's still open
- Copilot Business pricing after December. The $18 first-year price applies to purchases from 1 July to 31 December 2026. After that, the listed annual price is $21.
- Usage-based billing. Both vendors bill some features by use: Claude Enterprise above the seat price, and some of Copilot's advanced features on top of the licence. Neither cost is predictable from the price page alone.
- Claude in the EU Data Boundary. Anthropic's models in Microsoft's products are currently outside it. Microsoft says "currently", so this may change.
- Head-to-head claims. Microsoft's comparison uses simulated demonstrations, and we haven't found an independent test of the two on the same work.
We'll update this article when either vendor changes its prices, plans or data terms. The date at the top of the page shows when we last checked.
Sources
- Plans and pricing, Anthropic, October 2026: Claude Team and Enterprise prices, seat limits and the features in each plan.
- Is my data used for model training? (commercial), Anthropic Privacy Center, August 2026: no training on commercial inputs and outputs by default, feedback retention and the setting to turn rating off.
- Is my data used for model training? (consumer), Anthropic Privacy Center, March 2026: how Free, Pro and Max chats may be used.
- How long do you store my organization's data?, Anthropic Privacy Center, July 2026: retention and deletion for Claude for Work.
- Microsoft 365 connector, Anthropic, October 2026: what Claude can read and change in Microsoft 365, delegated access and admin consent.
- Set up the Microsoft 365 connector, Claude Help Center, October 2026: setup steps for Team and Enterprise and the Entra consent requirement.
- Claude for M365 overview and Data storage and retention, Anthropic, October 2026: the Office add-ins and what they keep on each device.
- Enterprise data protection in Microsoft Copilot and Microsoft Copilot Chat, Microsoft Learn, October 2026: Copilot's data terms, the renaming, and how web queries are handled.
- Anthropic models in Microsoft Online Services, Microsoft Learn, October 2026: Anthropic as a subprocessor, default settings by region, the EU Data Boundary exclusion and "with Data Retention" models.
- Microsoft 365 Copilot plans and pricing, Copilot Business and Copilot for enterprise, Microsoft, October 2026: Copilot prices, the first-year discount and Copilot Chat.
- Compare Copilot vs. Claude Enterprise, Microsoft, 2026: Microsoft's own comparison, used only to report its claims.