Microsoft is extending Microsoft 365 Copilot with Anthropic AI models as an alternative to OpenAI models. This introduces more model choice, but also new administrative and compliance decisions for European organizations.
Anthropic is disabled by default in the EU/EFTA/UK and must be explicitly enabled by an administrator. We do, however, recommend checking if this option is enabled in your tenant to prevent potential compliance issues.
Summary
- Microsoft adds Anthropic models as an additional AI provider in Microsoft 365 Copilot
- Anthropic is a prerequisite and is disabled by default in EU, EFTA, and UK tenants
- Once Anthropic is enabled:
- It becomes available in Copilot Chat and other applications
- It may be used by default in Copilot for Word, Excel, and PowerPoint, unless explicitly turned off
- When Anthropic models are used, data processing occurs outside the EU Data Boundary
- European organizations must actively review and configure settings
What is changing?
Microsoft is introducing a multi‑model approach to Microsoft 365 Copilot by integrating Anthropic models alongside existing OpenAI models. This expands AI model choice and supports future scenarios such as Copilot Cowork.
Anthropic operates as a Microsoft subprocessor under Microsoft Product Terms and the Microsoft Data Protection Addendum (DPA).
However, Anthropic models are not part of the EU Data Boundary, meaning Copilot data processed by Anthropic is handled outside the EU.
As a result, European organizations must explicitly decide whether they want to allow Anthropic models.
Step 1: Anthropic as a prerequisite (global setting)
In EU / EFTA / UK tenants:
- Anthropics models are disabled by default
- An admin must explicitly enable Anthropic as a Microsoft subprocessor
- If enabled: Multiple AI models are available across Microsoft offerings, including in Microsoft 365 Copilot, Researcher, Copilot Studio, Power Platform, Agent Mode in Excel, and Word, Excel, and PowerPoint agents
- If not enabled: It is not used anywhere in Copilot
How to enable/disable Anthropic Models in Microsoft 365 Apps
- Sign in to the Microsoft 365 admin center as an administrator assigned the AI Administrator
- Microsoft 365 Admin Center → Copilot → Settings → View all
- Select AI providers operating as Microsoft subprocessors:
- On the AI providers operating as Microsoft subprocessors page, under Available subprocessors for your organization, select Anthropic as a Microsoft subprocessor.
- Per default, this is disabled, and neither option is selected:
- Once you selected “Enable Anthropic as a Microsoft subprocessor subject to the above terms“, the option changes to:
- You can Disable/Enable Anthropic anytime.
Step 2: Where Anthropic is used once enabled
Once Anthropic is enabled as a subprocessor, two Copilot changes apply.
1) Copilot Chat – Anthropic Claude Sonnet (MC1247880)
- Anthropic Claude Sonnet becomes available as a selectable model in Copilot Chat
- Users can choose the model explicitly
- Disabled by default in EU/EFTA/UK until Anthropic is enabled
- Not available in Government or Sovereign clouds
2) Copilot in Word, Excel, and PowerPoint (MC1269241)
Microsoft introduced an app‑specific setting:
“Allow Anthropic models in Copilot experiences in Microsoft 365 apps”
- This setting applies only to Excel, PowerPoint and Word (Word integration will become available in summer 2026)
- Admins can turn this off
Compliance impact in both scenarios
If Anthropic is enabled and used:
- Copilot data is processed outside the EU Data Boundary
- No customer data is stored outside the EU
- Data remains encrypted in transit
- Anthropic acts strictly as a Microsoft subprocessor
- Enterprise Data Protection for Microsoft 365 Copilot continues to apply
Organizations requiring EU‑only processing must leave Anthropic disabled or explicitly disable it in Office apps. This is why it is necessary to keep up with Microsoft’s changes on a regular basis. Subscribe to our free licensing newsletter, if you aren’t already.
What organizations should do now
- Check whether Anthropic is enabled as a Microsoft subprocessor
- Review the Office app–specific setting for Word, Excel, and PowerPoint
- Assess EU Data Boundary and GDPR implications
- Document the decision for compliance and audit purposes
- Communicate internally how Copilot model usage is governed
Ready to empower your organization with Copilot?
We help you make licensing and compliance decisions that are audit-safe while saving costs and increasing productivity using AI. Contact our Microsoft licensing experts today.
Sources
MC1269241: Anthropic Models Enabled by Default in Copilot for Word, Excel, and PowerPoint
https://admin.cloud.microsoft/?#/MessageCenter/:/messages/MC1269241.
MC1247880: Anthropic Claude Sonnet Available in Microsoft 365 Copilot
https://admin.cloud.microsoft/?#/MessageCenter/:/messages/MC1247880
Anthropic as a subprocessor for Microsoft Online Services – Microsoft Learn: https://learn.microsoft.com/en-us/copilot/microsoft-365/connect-to-ai-subprocessor.
Copilot in Microsoft 365 apps with Anthropic models – Microsoft Learn: https://learn.microsoft.com/en-us/microsoft-365/copilot/copilot-anthropic-apps.