• Microsoft adds Copilot data controls to all storage locations February 24, 2026 12:30 PM 0 Microsoft is expanding data loss prevention (DLP) controls to block the Microsoft 365 Copilot AI assistant from processing confidential Word, Excel, and PowerPoint documents, regardless of their location. • Currently, Microsoft Purview DLP policies apply only to files stored in SharePoint or OneDrive, but not to those stored on local devices. • This change will be deployed through theAugmentation Loop (AugLoop) Office componentbetween late March and late April 2026 to ensure that DLP controls apply to all Office documents, whether they are stored locally, in SharePoint, or OneDrive. • “This enhancement responds to customer feedback requesting more consistent protection coverage across local and cloud-based file locations,“Microsoft saidin a message center update. • Once the change is deployed, Copilot will not be able to read or process Word, Excel, or PowerPoint documents that are labeled as restricted by DLP controls. • Microsoft also stated that the changes will be automatically enabled for organizations with DLP policies configured to block Copilot from processing sensitivity-labeled content, without requiring any administrative action or changes.

Article Summaries:

  • Microsoft is extending data‑loss prevention (DLP) controls so that its Microsoft 365 Copilot AI assistant cannot process confidential Word, Excel, or PowerPoint files regardless of where they are stored. The update, delivered through the Augmentation Loop (AugLoop) Office component, will be rolled out between late March and late April 2026 and will apply to documents on local devices, SharePoint, and OneDrive. The change follows a bug that let Copilot read confidential emails in Sent Items and Drafts for about a month. Once deployed, Copilot will automatically respect DLP sensitivity labels without any admin action.

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