Microsoft adds permission checks to Copilot Studio agents
Copilot Studio now pulls answers from enterprise knowledge bases using Foundry IQ Knowledge Retrieval over the Model Context Protocol. The system returns citations and respects existing user permissions. The update requires an MCP server and proper tenant configuration. Microsoft says it improves grounding and reduces hallucination for agents. No rollout date or pricing details were provided.
Before this change, agents built in Copilot Studio could only use public or manually uploaded data, so most companies kept them in pilot mode or avoided them entirely. Now the technical path exists for agents to read internal documents safely, but the permission layer still depends on Purview settings most mid-sized tenants have not configured, leaving the same data-risk problem in place.
Analysis
Skip Copilot Studio until your tenant has Purview labels and DLP policies turned on. Spend the next half hour testing one prompt template inside the Word or Teams Copilot you already have access to instead.
Citation
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