AI Mindset · Model Cheatsheets
Microsoft 365 Copilot

The Operating Layer Inside Your Working Day

Microsoft is turning Copilot from an assistant beside the apps into an agentic layer across the tenant. Work IQ provides organizational context; Chat answers; Cowork executes; multiple frontier models sit underneath. On September 1, 2026 Microsoft announced Claude Fable 5.1 in Copilot Cowork and Copilot Studio, the same day Anthropic launched it. Then something more interesting happened: the Cowork model page was updated on September 2 and still lists “Claude Fable 5 (Preview)” with no 5.1 on it. The doc is now newer than the announcement and still disagrees with it, which is a sharper lesson than documentation lag. The Fable retention gate is fully documented, the governance page has not moved since August 14, and Purview, identity and Agent 365 govern the result.

Verified September 3, 2026Copilot Chat · CoworkFable 5.1 announced Sept 1Model page stamped Sept 2 still says Fable 5Retention gate fully documentedWork IQ · Purview · Agent 365
1 / Meet Copilot

The teammate that starts with your organization’s context

Copilot’s moat is not a single model. It is the ability to reason over the work graph, meaning mail, meetings, files, people and activity, while respecting the permissions already defined in Microsoft 365.

Personality

Context-rich and process-aware

Copilot is strongest when the task depends on what your organization has already said, decided, created and permitted.

  • Tenant-aware grounding
  • Native business-app outputs
  • Enterprise identity and governance
Deploy it for

Work that should finish where it began

Meeting follow-up, document creation, spreadsheet analysis, presentation production, inbox work and governed agents.

  • Less copy-and-paste
  • Fewer tool handoffs
  • Work stays connected to its source systems
Choose Copilot when

Context and control outrank model loyalty

Use Copilot when the right answer depends on organizational context and must inherit permissions, compliance and brand systems.

  • Your work already lives in Microsoft 365
  • IT needs visibility and policy control
  • The output belongs in a Microsoft app

Chat or Cowork?

The new mental model separates an answer from completed work.

I need an answer or draft
Use Copilot Chat

Chat is the conversational layer for grounded questions, explanations, summaries, drafting and exploration.

  • Fast interaction
  • Ground in work or web context
  • User remains the primary operator
2 / What’s Current

Fable 5.1 arrived on day one, and the model page updated the next day without it

On September 1, 2026 Microsoft announced Claude Fable 5.1 in Copilot Cowork and Copilot Studio, the same day Anthropic released it. On September 2 the Cowork model page was updated and still reads “Claude Fable 5 (Preview),” with no 5.1 anywhere on it. That is not documentation lag: the doc is the newer of the two artifacts and it still disagrees with the announcement. The admin governance page has not been touched since August 14 and still names a Sonnet plus Opus Advisor pairing the model page no longer lists. The Fable retention gate, on the other hand, is now fully documented in Microsoft’s own words. Checked September 3, 2026.

Sept 1
Claude Fable 5.1 announced in Copilot Cowork and Copilot Studio, the day Anthropic released it
Sept 2
Cowork model page updated, still listing Claude Fable 5 (Preview) and no 5.1
Aug 14
Admin governance page last updated, still naming the Sonnet plus Opus Advisor pairing
$99
Microsoft 365 E7 per user/month, paid yearly on an annual commitment; a no-Teams SKU at $90.45
$15
Agent 365 standalone per user/month, paid yearly

Claude Fable 5.1 in Copilot Announced Sept 1

Microsoft published “Available today: Anthropic Claude Fable 5.1 in Microsoft Copilot” on September 1, 2026, by Bas Brekelmans, on the same day Anthropic launched the model. The body rendered this time, so the claims are quotable rather than inferred: “Claude Fable 5.1 is now joining the frontier models available in Copilot Cowork and Copilot Studio.” Microsoft aims it at “long-running work, financial analysis, and front-end visual coding, with tighter plans up front and more concise summaries at the end.” Access is administrator-managed: “Admins can manage access and configure availability for their organization through the Microsoft 365 admin center,” and “Availability may vary by region and organization.” Note what the post does not say: no pricing, no retention language and no mention of Mythos 5.1.

  • Copilot Cowork and Copilot Studio, per Microsoft
  • Positioned for long-running work, financial analysis and front-end visual coding
  • Admin-managed through the Microsoft 365 admin center
  • Availability may vary by region and organization
  • No pricing, no retention language, no Mythos 5.1

The doc is newer than the announcement and still disagrees The interesting part

The Cowork model page now reads “Last updated on 2026-09-02” and its list is, verbatim: Auto; GPT 5.5 (Frontier); GPT 5.6 Sol; GPT 5.6 Terra; Opus 5; Claude Sonnet 5; Claude Fable 5 (Preview). There is no Fable 5.1 on it, one day after Microsoft’s own blog said Fable 5.1 had joined Cowork. For two editions this guide used that page as its example of documentation lag, and the lesson needs sharpening rather than repeating. It is not simply that docs trail announcements. A freshly updated doc can still contradict the announcement, and here the doc is the newer artifact. A recent date stamp tells you the page was touched. It does not tell you the page is complete, and it certainly does not tell you it agrees with the blog.

  • Model page stamped 2026-09-02, one day after the 5.1 announcement
  • Verbatim list: Auto, GPT 5.5 (Frontier), GPT 5.6 Sol, GPT 5.6 Terra, Opus 5, Claude Sonnet 5, Claude Fable 5 (Preview)
  • A fresh stamp is not evidence of agreement or completeness
  • Read the picker in your own tenant before either page

The retention gate, documented in full Verbatim

The Cowork model page states it plainly: “In preview and off by default. An admin must turn it on in the Microsoft 365 admin center under Copilot settings before it appears in your picker. Requires data retention. When you select Fable 5, the model provider retains your prompts and responses, and Cowork shows a banner while it’s selected.” It adds that “Some models, such as Claude Fable 5 (Preview) (off by default), require data retention... instead of following Cowork’s default no-retention posture.” Read that beside the Anthropic side of the story, where Fable 5.1 and Mythos 5.1 both require 30-day retention and are unavailable under zero data retention unless Anthropic authorizes it, and the picture is consistent across both vendors: the Fable line is the retained line. That is a compliance decision with a citation behind it, which is easier to take to privacy than a rumor and no less necessary.

  • Off by default; an admin enables it under Copilot settings
  • The model provider retains prompts and responses
  • Cowork shows a banner while Fable is selected
  • Departs from Cowork’s default no-retention posture
  • Consistent with Anthropic requiring 30-day retention on the Fable line

Opus 5 Bare name on the page

Still listed on the Cowork model page, still as the bare string “Opus 5” rather than “Claude Opus 5,” while the adjacent rows read “Claude Sonnet 5” and “Claude Fable 5 (Preview).” The September 2 update did not change that. It matters only because it defeats a search: a compliance reviewer looking for the full product name on that page will find nothing. The full name is confirmed on the Microsoft 365 Roadmap, item id 568372, dated July 24, 2026, status Launched (Generally Available).

  • Renders as bare “Opus 5” on the Cowork model page
  • Full name confirmed on Roadmap item id 568372
  • Roadmap status: Launched (Generally Available)
  • Described as for complex, high stakes work

“Claude Opus 5” now appears in body text, but not in the Copilot doc set New, with a caveat

Earlier editions of this guide noted that no Microsoft page named Claude Opus 5 in readable body text. That has changed, though not where you would look for it. The Azure Databricks page “Databricks-hosted foundation models” on Microsoft Learn, updated August 28, 2026, reads: “Claude Opus 5 is Anthropic’s most capable hybrid reasoning model, building on the Opus series with a focus on agentic coding, code review, and long-horizon autonomous work,” with the endpoint databricks-claude-opus-5. Record both halves of that. Within the Microsoft 365 Copilot documentation set the string “Claude Opus 5” still does not appear, and the Cowork page still uses bare “Opus 5.” One Microsoft property names the model in full; the property your Copilot admins actually read does not.

  • Azure Databricks foundation models page, updated August 28, 2026
  • Endpoint databricks-claude-opus-5
  • Still absent in full from the Microsoft 365 Copilot doc set
  • A different Microsoft property, a different documentation standard

Claude Sonnet 5 Everyday tier

Announced on July 2, 2026 as rolling out in Copilot Cowork and PowerPoint, and still carried on the Cowork model page as “For everyday tasks and fast responses such as drafting, quick lookups, and day-to-day work.” Claude Sonnet 4.6 remains off the table. Read that beside the Opus 5 description and you have Microsoft’s own routing hint: Sonnet 5 is the everyday tier, Opus 5 is the escalation for complex, high-stakes work.

  • Replaced Sonnet 4.6, which is no longer listed
  • Documented for everyday tasks and fast responses
  • Escalate to Opus 5 when the stakes justify it

Sonnet plus Opus Advisor Governance page only

The paired mode, where Sonnet handles the turn and Opus reviews the result, is still absent from the Cowork model page and still named on the admin governance page. The governance page has not been touched in this window: it remains stamped 2026-08-14 while the model page has moved to 2026-09-02. So the disagreement is now aging rather than same-day, which is worse rather than better. Treat the picker in your own tenant as the authority for what you can select, and do not design a review workflow around Advisor.

  • Absent from the Cowork model page since August 14
  • Still named on the governance page, unchanged since August 14
  • The gap between the two pages is now nineteen days wide
  • Anthropic is a named subprocessor, so check data handling

GPT 5.6 Sol and GPT 5.6 Terra Still listed

Both GPT 5.6 variants remain on the Cowork model page in the September 2 update: Sol, “Intelligent and efficient for hard work,” and Terra, “Balanced effort for common tasks.” GPT 5.5 (Frontier), “Capable model for medium effort work,” is still listed alongside them, so nothing on the page makes GPT-5.6 the preferred anything. Microsoft has published no response to the OpenAI Sol price change.

  • Two GPT 5.6 variants documented in Cowork
  • GPT 5.5 (Frontier) still listed beside them
  • No Microsoft response to the OpenAI Sol price change

Cowork effort levels and cost visibility August 31 roundup

The August 2026 Copilot roundup, published August 31, 2026, adds the controls most directly relevant to running Cowork at scale. Cowork gains effort levels: Light, Medium, High, Extra High and Max. The /cost skill now shows the percentage of the monthly credit limit remaining, which is the number a team lead actually needs mid-month. The Scheduled tab has been renamed Automations. Chat sharing and multi-model regeneration arrive, Copilot Notebooks gains a dual OneNote experience, and GitHub Copilot AI Credit tracking is described as rolling out in September.

  • Effort levels: Light, Medium, High, Extra High, Max
  • /cost shows percentage of monthly credit limit remaining
  • Scheduled tab renamed Automations
  • GitHub Copilot AI Credit tracking rolling out in September

New connectors August 31 roundup

The same roundup names new connectors including Harvey, iManage Work, Mercury, Xero, Statista and ZoomInfo. Harvey and iManage Work are the two to notice if you run a legal or professional-services tenant: they put matter and document systems into the grounding set, which changes what a Copilot answer can be built from and therefore what your permission review has to cover.

  • Harvey, iManage Work, Mercury, Xero, Statista, ZoomInfo
  • Legal and finance systems entering the grounding set
  • Every new connector widens the permission review, not just the answer

Local browser use reaches GA August 28

The August 28, 2026 Cowork what’s-new entry moves local browser use from Frontier to general availability for all Microsoft 365 Copilot tenants. It requires Edge. The same entry adds workspace file input for plugin tools, and event-driven tasks that fire on a matching email or Teams message, including @mentions. An agent that can drive a browser on a user’s machine is a different risk surface from one that reads the graph, so review it before it is on by habit.

  • Local browser use GA for all Microsoft 365 Copilot tenants
  • Requires Edge
  • Workspace file input for plugin tools
  • Event-driven tasks on a matching email, Teams message or @mention

Branded PowerPoint creation

Cowork can build presentations using approved templates from the organizational asset library, and Work IQ backs presentation creation through Agent Mode in Copilot in PowerPoint.

  • Correct colors, fonts and layouts
  • Work IQ grounding in Agent Mode
  • Source context can stay attached

Visual creation in flow

Cowork can create deck graphics, document illustrations and email imagery without forcing the user into a separate creative app. The August 25, 2026 release notes add image generation in Cowork via ChatGPT Images 2.0.

  • Image generation in Cowork via ChatGPT Images 2.0
  • Integrated into deliverables
  • Still requires brand and truth review

Microsoft 365 E7 and Agent 365 GA May 1

The Frontier Suite tier was announced March 9, 2026 and reached general availability May 1, 2026. Pricing re-confirmed September 3, 2026 on Microsoft’s own pages: E7 at “$99.00 user/month, paid yearly (Annual commitment),” a no-Teams SKU at “$90.45 user/month, paid yearly,” and Agent 365 standalone at “$15.00 user/month, paid yearly.” The surrounding tiers read on August 19, 2026 and not re-checked this cycle were E5 at $60.00, E3 at $39.00, and Copilot Cowork listed as “Metered” across Business Premium with Copilot at $32.00, Business Standard with Copilot at $23.50 and Copilot Business at a promotional $18.00 against $21.00. Metered means Cowork execution is a variable line on top of the seat, whichever seat you buy.

  • E7 unifies E5, Copilot and Agent 365
  • E7 No Teams at $90.45 user/month, paid yearly
  • Agent 365 standalone at $15.00 user/month, paid yearly
  • Cowork is metered on every Business tier that carries it

Let Auto route the model, or override with a reason

Auto is still a Cowork setting: no first-party documentation supports automatic model routing in Word, Excel, PowerPoint or Chat. Model choice keeps spreading, though. The August 11, 2026 release notes added Anthropic model selection in Word; the August 25 notes added model selection for Researcher in Chat and an “Enable Sonnet 5 in models menu” setting in Word for Web. Choosing has spread well beyond Cowork; routing has not.

Mixed business task in Cowork
Leave Cowork on Auto

Inside Cowork, Auto can choose the model that fits the stage of work, reducing the need for every employee to become a model dispatcher. Outside Cowork, the choice is yours to make.

  • Best general default in Cowork
  • Can use different models across a task
  • Not a documented behavior in the Office apps
3 / Work IQ

The context layer is the real product advantage

Work IQ connects the people, content and activity already present in Microsoft 365. That turns “what does the model know?” into “what can the system retrieve, permission and use for this employee?”

People

Organizational relationships

Who owns the work, who attended, who collaborates and which roles matter to the task.

Content

Files and communications

Documents, presentations, spreadsheets, emails, chats and meeting artifacts. The August 25, 2026 release notes add Viva Engage private content as a Copilot grounding source.

Activity

What changed and when

Recent edits, decisions, conversations and project movement provide operational context.

Permissions

The security boundary

Copilot should surface only the information the requesting user is already entitled to access.

Business systems

Plugins and Dynamics

Fabric, Dynamics 365 and partner plugins extend work beyond the Microsoft content graph. New connectors in the August 2026 roundup include Harvey, iManage Work, Mercury, Xero, Statista and ZoomInfo.

Standards

Skills and instructions

Custom skills encode the process, rules and output expectations the organization wants repeated.

Brand

Asset libraries

Approved templates and visual assets allow creation to inherit organizational identity.

Developer surface

Work IQ REST endpoint

The August 25, 2026 release notes add a unified Work IQ REST endpoint for agents and workflows, which turns the context layer into something an in-house agent can call directly rather than only something Copilot consumes.

How a context-rich task should work

A good Copilot prompt points to the work instead of retyping it.

Point
Reference the real sources

Name the launch brief, steering meeting, finance workbook and project channel that contain the current state.

  • Avoid pasted fragments
  • Use the latest authoritative file
  • Respect permissions
Leadership pack
Using the launch brief, the most recent steering meeting, the finance workbook and the project channel, build the leadership decision pack. Reconcile conflicting dates, name missing owners and end with the decisions required this week.
Meeting to action
From today’s meeting, update the project plan, draft the stakeholder email and create the five-slide progress deck using our approved template. Do not send or publish anything until I approve.
4 / Cowork

Cowork changes Copilot from assistant to operator

The value is not a longer answer. Cowork takes responsibility for the sequence of work: planning, tool use, file creation and delivery, while the organization retains policy and cost control.

The governed Cowork loop

Use a clear boundary at every stage.

Task
Define the completed deliverable

State the business outcome, required artifact, source systems, deadline and conditions that require escalation.

  • Name the owner
  • Set the review point
  • Keep external actions explicit

Skills

Custom instructions that make Cowork follow the organization’s preferred process and output standards.

  • Create and edit in the Customize area
  • Combine personal, partner and organization-wide skills
  • Use for recurring work

Plugins

Connect Cowork to partner data and business systems without hard-coding every integration into the prompt. The August 28, 2026 what’s-new entry adds workspace file input for plugin tools.

  • Dynamics and Fabric support
  • Partner marketplace
  • Admin-managed availability

Automations Renamed Aug 31

The Scheduled tab is now called Automations, per the August 2026 Copilot roundup. The surface is the same idea it always was: work that runs over time, making the home page a task-management view rather than a chat history. Update your internal training, because the old label is in every screenshot you have.

  • Review in-flight work
  • Adjust automated tasks
  • Keep ownership visible

Event-driven tasks Restated Aug 28

Cowork tasks can fire on an event rather than a clock: a matching email arriving, or a Teams message or @mention. The August 28, 2026 what’s-new entry restates this alongside the new capabilities. It moves Cowork from something a person starts to something the work starts.

  • Trigger on a matching email
  • Trigger on a Teams message or @mention
  • Define the stop condition before you enable it

Local browser use GA Aug 28

Local browser use moved from Frontier to general availability for all Microsoft 365 Copilot tenants on August 28, 2026. It requires Edge. An agent driving a real browser on a real machine is a materially different risk surface from one reading the graph, so decide the policy before the capability arrives by default.

  • GA for all Microsoft 365 Copilot tenants
  • Requires Edge
  • Review what a browsing agent may sign in to

Cost management

Usage-based execution requires budgets, monitoring and an explicit answer to who is allowed to spend organizational agent capacity. The /cost skill now reports the percentage of the monthly credit limit remaining.

  • Cost Management Dashboard
  • Admin budgets and controls
  • Measure outcome, not token volume

DLP controls

Purview can restrict sensitive information and email behavior inside Cowork workflows.

  • Policy follows the work
  • Protect external actions
  • Test real edge cases

Completed deliverables

The success metric is a usable file, update or outcome, not the sophistication of the plan.

  • Inspect the result
  • Require completion evidence
  • Keep human sign-off where needed
5 / Inside the Apps

The interface disappears into the applications people already use

Copilot becomes more valuable when the user does not need to export context, explain the file structure or translate the output into the application’s native format.

Word

Draft, edit and reshape

Create and revise documents in context, with stronger control over structure, tone and targeted edits. Word for Web gained an “Enable Sonnet 5 in models menu” setting in the August 25, 2026 release notes.

  • Use existing templates
  • Reference source files
  • Review tracked changes
Excel

Analyze with skills and rules

Use agent-style assistance, personalization and explicit rules for spreadsheet work. The August 25, 2026 release notes add Python in Edit with Copilot for Excel.

  • Inspect formulas
  • Model scenarios
  • Explain assumptions
PowerPoint

Build on the approved brand

Use organizational assets, references and branded templates to reduce generic deck output.

  • Approved master
  • Source-aware narrative
  • Generated visuals in flow
Outlook

Move from inbox to action

Customize and refine responses using the surrounding thread, calendar and work context.

  • Draft in the user’s style
  • Summarize decisions
  • Confirm before sending
Teams

Capture meeting reality

Use transcripts, chat and meeting artifacts to create summaries, actions and follow-up materials.

  • Name owners
  • Resolve ambiguous commitments
  • Link back to the discussion
Notebooks

Curate a working context

Bring a deliberate set of references together for a sustained piece of research or planning. The August 2026 roundup adds a dual OneNote experience for Copilot Notebooks.

  • Control the source set
  • Add references over time
  • Keep citations attached
Planner

Turn language into accountable work

Planner agents can help translate decisions into tasks, ownership and progress.

  • Set dates and owners
  • Review dependencies
  • Avoid silent task creation
Admin Center

Measure and manage

Adoption, policy, cost and agent activity become part of the deployment, not an afterthought.

  • Usage and value signals
  • Model and plugin policy
  • Risk and spend controls
August 25 release notes

Unified chat and a Work IQ button

The August 25, 2026 batch unifies web and work chat behind a single surface with a dedicated Work IQ button, and adds model selection for Researcher in Chat. The button is the interesting part: it makes the grounding decision explicit to the user instead of leaving it to a mode they may not have noticed they were in.

  • Unified web and work chat
  • Dedicated Work IQ button
  • Model selection for Researcher in Chat
August 25 release notes

Viva Engage becomes grounding

Viva Engage private content can now ground Copilot answers. If your organization runs private Engage communities as a knowledge channel, this widens what a Copilot answer can be built from, and therefore what your permission review has to cover.

  • Private Engage content in the grounding set
  • Check community membership as an access control
  • Re-run the oversharing review after enabling it
August 25 release notes

A Work IQ endpoint for your own agents

A unified Work IQ REST endpoint for agents and workflows moves the context layer from a Copilot feature to a platform an in-house team can call. That is the difference between buying Copilot and building on Work IQ.

  • REST access for agents and workflows
  • Plan authentication and scope before the first prototype
  • Governance follows the endpoint, not the app
August 11 release notes

Model choice arrives in Word

The August 11, 2026 batch added “Choose Anthropic models when editing with Copilot in Word.” Automatic routing is still a Cowork behavior, but model choice is no longer a Cowork-only idea, and the August 25 notes extended it again to Researcher in Chat and Word for Web.

  • Anthropic models selectable in Word
  • Alongside the existing OpenAI models
  • Auto routing stays Cowork-only
August 11 release notes

A dashboard for credit consumption

The Consumption Dashboard tracks Copilot credit usage for Cowork and WorkIQ API services. If you are running metered Cowork, this is the surface that tells you what it costs before the invoice does, and the /cost skill now adds a percentage-remaining view inside the session itself.

  • Covers Cowork and WorkIQ API services
  • Pair it with admin budgets
  • Measure cost against completed work
July 15 release notes

MCP agents reach the Office apps

Agents built on the Model Context Protocol are available inside Word, Excel, PowerPoint and Outlook, the point at which an external tool stops being a Chat sidebar and starts operating on the document in front of the user.

  • Word, Excel, PowerPoint and Outlook
  • Scope tool access per agent
  • Review what the agent can change, not only what it can read
Excel to PowerPoint
Audit this workbook, correct only verified formula issues, run the agreed sensitivities, then create the executive deck using our asset-library template. Every chart must link back to the workbook source.
Teams to Planner
Turn this meeting into an action plan. Distinguish decisions, proposed actions and unresolved discussion. Create tasks only for explicit commitments and ask me to approve owners and dates.
Outlook chief of staff
Review this thread and the related project context. Draft a concise response in my normal style, identify the decision being requested and list any commitments the draft would create. Do not send.
Word review
Review this document against our policy and the cited source materials. Suggest changes with reasons, preserve the author’s voice and flag every statement the evidence cannot support.
6 / Behavior Playbook

Eight habits for making Copilot an operating layer, not another sidebar

The organizational value appears when teams change how they reference context, delegate work and standardize recurring processes.

01

Reference, do not retype

Point to the authoritative meeting, file, person or project context.

02

Choose Chat or Cowork

Use Chat for an answer; Cowork when the responsibility is a completed deliverable.

03

Let Auto route inside Cowork

Auto routing is still Cowork-only. Model choice is not: Word gained Anthropic model selection on August 11, and Researcher in Chat and Word for Web followed on August 25. Elsewhere, pick deliberately, and only when the task has a property that benefits.

04

Finish in the native app

Ask for the Word file, Excel model, PowerPoint deck or Planner update you will use.

05

Preserve provenance

Keep source links, workbook references and meeting context attached to claims.

06

Standardize successful work

Turn repeated prompts into governed skills, plugins or agent templates.

07

Treat permissions as quality

Incomplete or excessive access both degrade the usefulness and safety of grounding.

08

Measure outcomes

Track time saved, decision quality and completed work, not chat volume. And when a Microsoft blog post and a Microsoft Learn page disagree about which models you have, as they do today, the picker in your own tenant is the only answer that binds.

7 / Governance

The context advantage becomes a liability without information hygiene

Copilot inherits the strengths and weaknesses of the Microsoft 365 environment. Permissions, labels, stale files, duplicate sources and ownership determine the quality of the AI experience. So does knowing which Microsoft page to believe.

Permission sprawl

Copilot can make overshared information easier to discover. Fix access before celebrating retrieval. Every connector added in the August 2026 roundup, and Viva Engage private content as a grounding source, widens the surface this applies to.

Stale authority

Several plausible versions of the same file can lead to confident grounding in the wrong source.

Model availability

The documented list moved again on September 2, 2026, and it moved without adding the model Microsoft had announced the day before. The Cowork model page reads Auto, GPT 5.5 (Frontier), GPT 5.6 Sol, GPT 5.6 Terra, Opus 5, Claude Sonnet 5 and Claude Fable 5 (Preview). Claude Fable 5.1 was announced for Cowork and Copilot Studio on September 1 and is not on the page. Claude, OpenAI and Frontier capabilities depend on plan, rollout stage and administrator policy: read the picker first, then the page, then the blog, and check the date stamp on all three without assuming the freshest one is the most complete.

Preview models and retention

Claude Fable 5 (Preview) and its gate are fully documented. The Cowork model page states that it is in preview and off by default, that an admin must turn it on in the Microsoft 365 admin center under Copilot settings, that it requires data retention, that the model provider retains your prompts and responses, and that Cowork shows a banner while it is selected. It adds that such models depart from Cowork’s default no-retention posture. The Anthropic side of the same story is firmer still: Fable 5.1 and Mythos 5.1 require 30-day retention and are not available under zero data retention unless Anthropic authorizes it. If your organization holds a zero data retention position, the Fable line is a policy exception, not a picker setting.

Agent 365 licensing gate

Soften what you budget against, because the readable evidence is thinner than earlier editions of this guide implied. The Microsoft Agent 365 Learn overview, updated 2026-08-20, says only: “Microsoft Agent 365 works best when using Microsoft E5 as a pre-requisite. At least one user must be licensed with a qualifying Microsoft Agent 365 license to enable Agent 365.” That is “works best when,” not “requires.” No first-party page dates a hard prerequisite to June 1, 2026, and the segment-by-segment licensing detail earlier editions quoted could not be re-verified this cycle. Treat any hard prerequisite as unconfirmed and check it with your licensing desk before it becomes a budget line. What is confirmed is the standalone price: $15.00 user/month, paid yearly.

Usage-based cost

Cowork can create value and variable spend. Budgets should map to business outcomes, and the /cost skill now shows the percentage of the monthly credit limit remaining so a team can see the burn before the invoice does.

External actions

Sending, publishing, changing records or contacting customers requires explicit authority and review. Local browser use reached GA on August 28, 2026, which extends this from records to anything a browser session can reach.

DLP edge cases

Policy must be tested against real agent workflows, not only ordinary document sharing.

Generated brand risk

Approved templates reduce visual drift but do not guarantee factual or narrative quality.

Agent proliferation

Skills, plugins and agents need ownership, lifecycle management and retirement, not just creation.

Control layerQuestion to answerUseful evidence
IdentityWho is asking and what can they access?Effective permission review
InformationWhich source is authoritative and current?Labels, ownership and version policy
ModelWhich models may process this task?Admin configuration and the live picker first; then the dated Learn page and the dated announcement, which currently disagree
RetentionDoes this model retain our prompts and responses?The Cowork model page banner and gate language, plus Anthropic’s 30-day retention requirement on the Fable line
CommercialDo we hold the prerequisite licenses?Microsoft states Agent 365 “works best when using Microsoft E5 as a pre-requisite” and that at least one user needs a qualifying Agent 365 license. Any harder prerequisite is unconfirmed: confirm with your licensing desk
AgentWhat can it change and spend?Tool scope, budgets, action logs and whether local browser use is enabled
OutcomeDid the work create measurable value?Completed artifact, cycle time and quality review
8 / Sources

First-party evidence behind this guide

Microsoft ships Copilot changes monthly, and its Learn documentation has usually trailed its own blog. This edition records a case where that is no longer the shape of the problem: the Cowork model page was updated on September 2, 2026, a day after Microsoft announced Claude Fable 5.1 in Cowork, and it still does not list 5.1. So where a Microsoft page and a Microsoft post disagree, this guide cites both, says which is which, and does not assume the fresher stamp wins.

Available today: Anthropic Claude Fable 5.1 in Microsoft CopilotMicrosoft 365 Copilot Blog · September 1, 2026 · Fable 5.1 in Cowork and Copilot StudioChoose a model for Copilot CoworkMicrosoft Learn · last updated 2026-09-02, checked September 3, 2026 · Auto, GPT 5.5 (Frontier), GPT 5.6 Sol, GPT 5.6 Terra, Opus 5, Claude Sonnet 5, Claude Fable 5 (Preview), with no Fable 5.1Copilot Cowork admin and governanceMicrosoft Learn · last updated 2026-08-14, checked September 3, 2026 · documents the Fable retention gate, but still lists the Sonnet plus Opus Advisor pairing the model page droppedWhat’s New in Microsoft Copilot, August 2026Microsoft 365 Copilot Blog · August 31, 2026 · the August roundupDatabricks-hosted foundation modelsMicrosoft Learn · updated August 28, 2026 · the only Microsoft page naming Claude Opus 5 in readable body text · checked September 3, 2026Available today: Anthropic’s Claude Opus 5 in Microsoft 365 CopilotMicrosoft 365 Copilot Blog · July 24, 2026 · replaces Opus 4.8; body does not renderAvailable today: Anthropic’s Claude Sonnet 5 in Microsoft 365 CopilotMicrosoft 365 Copilot Blog · July 2, 2026 · Cowork and PowerPoint at announcementAvailable today: OpenAI’s GPT-5.6 in Microsoft 365 CopilotMicrosoft 365 Copilot Blog · July 9, 2026 · the launch, not a Cowork listingWhat’s new in Copilot CoworkMicrosoft Learn · updated August 28, 2026 · local browser use GA requiring Edge, workspace file input for plugin tools, event-driven tasks · checked September 3, 2026Copilot Cowork is now generally availableMicrosoft 365 Blog · June 16, 2026 · the most recent Microsoft 365 blog post relevant here; that blog has published nothing since July 30, 2026Microsoft 365 E7 and Agent 365 are now generally availableMicrosoft Community Hub · May 1, 2026 · E7 at $99 and Agent 365 at $15 per user/month, both re-confirmed September 3, 2026Introducing the First Frontier SuiteOfficial Microsoft Blog · March 9, 2026 · the original announcement, superseded by the GA postWhat’s New in Microsoft 365 Copilot, July 2026Microsoft 365 Copilot Blog · July 30, 2026 · the July roundup, superseded by the August one aboveWhat’s New in Microsoft 365 Copilot, June 2026Microsoft Community Hub · June 30, 2026 · superseded by the later roundupsRelease notes for Microsoft 365 CopilotMicrosoft Learn · checked September 3, 2026 · August 25 batch: Viva Engage grounding, the unified Work IQ REST endpoint, unified web and work chat, Researcher model selection, Sonnet 5 in Word for Web, ChatGPT Images 2.0 in Cowork, Python in Edit with Copilot for ExcelAnthropic models in Microsoft Online ServicesMicrosoft Learn · subprocessor and data-handling terms(Co)work in ProgressMicrosoft 365 Copilot Blog · May 5, 2026

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