What’s New in Microsoft 365 Copilot | August 2025

If you are using Microsoft Copilot regularly, you are certainly wondering “What’s New in Microsoft 365 Copilot this month?” Well, you have come to the right place!

Microsoft is steadily transforming how businesses work with its AI-powered Copilot features. The August 2025 updates bring meaningful improvements for both IT administrators and everyday users, focusing on governance, smarter workflows, and new creative tools.

This blog highlights the key changes you should know about. If you’d like to explore the full details, you can read Microsoft’s official update post here. You can also learn more about using Microsoft 365 Copilot in Teams through our resources.

🟧 TL;DR

• Admins: Centralized agent management, usage metrics, new approval workflows, and better controls for ownerless agents.

• Security: Microsoft Purview now detects risky AI activity and applies adaptive protection policies.

• Users: Smarter productivity with GPT-5 toggle, enhanced reference handling, and a new PowerPoint presentation builder.

• Creatives: Image reasoning, natural language editing, and a side-by-side editor (coming soon).

• Accessibility: Even users without a Copilot license can now generate and edit images.

Copilot Control System: More Admin Power

IT administrators now have more visibility and control over how Copilot is used across the organization:

• Centralized Agent Management: SharePoint agents can now be discovered, managed, and governed directly in the Microsoft 365 admin center.

• Copilot Search Metrics: Track adoption and usage trends more effectively.

• Frontier Program Workflow: A new approval system for testing early Copilot features before they’re rolled out broadly.

• Message Pack Integration: Simplified billing and usage monitoring for Copilot Chat.

• Ownerless Agent Controls: Admins can block, reassign, or retire unassigned agents to maintain compliance.

For businesses that want oversight without slowing productivity, this ties directly into how managed IT services help keep systems secure and compliant.

Smarter Risk Management with Microsoft Purview

Security continues to be a priority. Microsoft Purview now detects risky AI activity by analyzing sensitive prompts and responses. With Adaptive Protection, security teams can apply dynamic policies that respond to risky behavior in real time.

This is another reason it’s critical to learn more about protecting your business from cybersecurity risks with a proactive strategy.

User Experience Upgrades

The August release also improves usability for end users:

• SharePoint Agents in Copilot App & Teams: Personalized agent lists and workflows make it easier to access the right tools.

• GPT-5 Integration: Choose between deeper reasoning or faster responses depending on task complexity.

• Enhanced Reference Capabilities: Copilot Chat can now analyze email attachments (Word, Excel, PDFs, etc.).

• Presentation Builder: Quickly transform ideas into polished PowerPoint decks.

If you’ve ever wondered how AI can transform everyday productivity tools, see how AI can transform everyday productivity tools.

Visual Intelligence & Editing

For creative work, Copilot adds new visual intelligence features:

• Image Reasoning: Ask questions about images inside uploaded documents and get grounded answers.

• Natural Language Image Editing: Generate and refine visuals directly in chat.

• Side-by-Side Visual Editor (coming soon): Move seamlessly between prompt-based image generation and hands-on editing.

These features align with broader industry changes — explore how businesses are adopting AI to work smarter.

Read more:

• 3 Ways AI Helps Legal Professionals Work Smarter
• How Managed IT Services Empower Law Firms to Work Smarter
• 3 Ways AI Helps Construction Project Managers Work Smarter
• AI Code Assistants Explained: How They Help Developers Work Smarter

 

Accessibility for All

Users without a Copilot license can now generate and edit images in the Microsoft 365 Copilot app, making AI tools more widely accessible.

Smarter Summarization & Customization

Finally, two updates enhance productivity and personalization:

• Edge for Business Summarization: Right-click any dense content to generate an instant summary.

• Custom Dictionaries in Teams: Admins can upload organization-specific terminology to improve transcript accuracy.

Final Thoughts

The August 2025 Microsoft 365 Copilot updates strike a balance between administrative control, user productivity, and creative innovation. From stronger governance to smarter summarization and image editing, these changes make Copilot more powerful and more practical for organizations of all sizes.

As Microsoft Copilot evolves, the right IT partner can help you get the most value out of these tools. Discover how managed IT services support your business as tools like Microsoft Copilot evolve.

👉 Want to see the full breakdown? Visit the Microsoft Tech Community blog update.

A Word From the Author

Hey! Gloria here. AI is evolving at an incredible pace, and it can feel overwhelming to keep up. That’s why I appreciate when vendors like Microsoft release clear updates – it gives us a quick way to scan what’s new and think about what might be useful. None of us will use every single feature, but I often find myself reading an update and thinking, “Ooo, I should look into that.” My hope is that these updates spark the same curiosity and ideas for you. Enjoy!

🟧 TL;DR Recap
The Microsoft 365 Copilot August 2025 updates deliver:

• More admin control for managing agents and tracking usage.

• Stronger risk detection with Microsoft Purview.

• Smarter user productivity tools, including GPT-5 options and better PowerPoint creation.

• New visual intelligence features like image reasoning and editing.

• Broader accessibility, letting even non-license users generate images.

📌 Bottom line: These updates make Microsoft 365 Copilot more secure, accessible, and useful than ever.