Microsoft Copilot or ChatGPT: which fits your SMB?

Copilot or ChatGPT: why people compare them

Microsoft Copilot and ChatGPT almost always come up together at work. That makes sense: both are AI assistants running on large language models, both popular with SMBs, and at first glance they do roughly the same thing. Write text, answer questions, generate ideas.

When you dig deeper, the differences are bigger than many business owners think. Ecosystem integration, pricing model, hosting, GDPR and use case fit are all far apart. And the wrong choice means either overpaying or being stuck with a tool that doesn't match how your team actually works.

This article compares both honestly: what they are, where they shine, what they cost, and which one suits which type of business. No winner-loser, just clarity on which choice makes sense in which situation.

What is Microsoft Copilot, exactly?

Microsoft Copilot isn't a single product, it's a family. Microsoft 365 Copilot, GitHub Copilot, Sales Copilot, Studio Copilot: all different things under the same brand name. For SMBs the conversation is usually about Microsoft 365 Copilot, the assistant embedded in Word, Excel, PowerPoint, Outlook and Teams.

Under the hood Copilot runs on GPT-4 (and newer models) through Azure OpenAI, with Microsoft's own safety layer on top. The big strength sits in the Microsoft Graph: the assistant knows your emails, calendar, Teams chats, SharePoint documents and OneDrive files. Ask "summarise last week's discussion" and it knows which discussion you mean.

Hosting runs on Azure, with EU data residency native for business clients. GDPR is well covered by default for M365 tenants. For SMBs with data sovereignty concerns that saves a lot of contract work.

Pricing sits roughly at $30 per user per month for Microsoft 365 Copilot, on top of your existing M365 E3 or E5 licence. Microsoft now also offers cheaper variants like Copilot Business and Copilot Pro for individual users. Exact rates shift, so check current prices before you decide.

Strong at: anything happening in Office. Writing Excel formulas, summarising email threads in Outlook, building a PowerPoint deck from a brief, summarising meetings in Teams.

What is ChatGPT, exactly?

ChatGPT is OpenAI's flagship product. It comes in four flavours: free, Plus (for individuals), Team (for groups) and Enterprise (for larger organisations). Under the hood, GPT-5 and GPT-4 variants run, with DALL-E for image generation and Whisper for audio built in.

Hosting is in the US by default. EU data residency has been available since 2025, but only on ChatGPT Enterprise, ChatGPT Edu and the API. For ChatGPT Plus and Team, US hosting remains the default, which is a watch point for customer or employee data. Since Plus, input is no longer used for model training, which addresses a major concern, but it doesn't change where the data physically sits.

Pricing is around $20 per user per month for ChatGPT Plus, ChatGPT Team in the same range or slightly above, and Enterprise on custom pricing. For a 10-person team on the Team tier you're at a few hundred euros per month.

Strong at: open conversations without file context, image generation via DALL-E, code, voice mode, and Custom GPTs (your own mini-bots set up per team or per use case).

Side-by-side comparison

| Aspect | Microsoft Copilot | ChatGPT | |--------|-------------------|---------| | Price (entry) | from around $30/user/month (M365 add-on) | from around $20/user/month (Plus) | | Hosting | EU/Azure native | US, EU option on Enterprise | | GDPR | Solid by default | Requires Enterprise for EU residency | | Dutch | Good | Very good | | Image generation | Limited | Strong (DALL-E) | | Excel/Word integration | Native | Via copy-paste or plugins | | Custom workflows | Power Automate | Custom GPTs | | Business data linking | Microsoft Graph (email, Teams, SharePoint) | External upload per chat | | Input used for training | Not used | Not used (Plus and above) | | Voice mode | Limited | Strong |

A few nuances on the table. On pure writing quality in Dutch (and English), ChatGPT has a slight edge, especially on creative work. But in the Office context Copilot wins because it knows what you're working on. Image generation isn't built into Copilot the way it is in ChatGPT, and the plugin and Custom GPT ecosystem at OpenAI is richer.

When do you pick Copilot?

Copilot is the logical choice when:

• Your organisation already runs fully on Microsoft 365 (E3 or E5).
• GDPR and EU data residency are hard requirements without room for Enterprise budget.
• Your employees mainly work in Word, Excel, Outlook and Teams.
• You want to automate workflows with Power Automate.
• IT governance is a priority and you want strong admin controls over who can do what.
• You get value from context: it sees your emails, calendar, documents.

Especially for finance teams, HR, accountants and general office work that lives around Office, Copilot delivers immediate productivity gains. Excel formulas that you'd otherwise have to look up, a 50-email thread summarised in two sentences: those are daily time savings.

When do you pick ChatGPT?

ChatGPT is the logical choice when:

• You do a lot of text generation for marketing, content or communications.
• Image generation or coding plays a role.
• You want open conversations without M365 context, for brainstorming or research.
• You want flexible Custom GPTs per team or use case.
• You don't (or don't fully) run on Microsoft 365.
• You don't want to lock yourself into a Microsoft ecosystem.

Marketing and content teams usually choose ChatGPT (or Claude) because writing quality is stronger and image generation is built in. See also AI in marketing and content for how to operationalise this.

The hybrid approach (often the best answer)

In practice these don't have to be either-or choices. Most SMBs we work with end up with a combination:

• M365 Copilot for admin work, productivity and everything inside Office.
• ChatGPT Team (or Claude Team) for creative work, content, research and open conversations.
• Optionally separate tools for specific use cases: a local model for sensitive data, GitHub Copilot for developers, Recraft or Midjourney for image production.

Sounds expensive, but if you do the math: $30 plus $25 per user per month for the baseline isn't the bottleneck for most SMBs. The win comes from your employees grabbing the right tool per task, instead of getting stuck because one tool lacks the other's context.

Real-world cases per business type

10-FTE marketing agency without M365. ChatGPT Team for content and image, optionally Claude Pro per person for long-form writing. No Copilot, because the M365 foundation is missing and the value-add for pure content production is limited.

25-FTE accounting firm on M365. Copilot for Excel, Outlook and Teams (where the work happens), plus separate ChatGPT or Claude licences for the few people who write longer pieces. GDPR is covered for the bulk of work by Copilot.

50-FTE tech company on M365. Copilot for general productivity, GitHub Copilot for the developer team, and separate ChatGPT or Claude licences for the marketing and design team. Three tools, clearly split per function.

5-FTE startup without M365. ChatGPT Plus per person, optionally Claude alongside for longer documents. Copilot has little use here, because the M365 context that gives Copilot its value is missing.

What about privacy and GDPR?

This is the heaviest point for many SMBs. Here's the practical state of play in 2026.

Copilot. Microsoft Graph data stays inside your tenant, EU hosting via Azure is the default. For most SMBs with GDPR concerns this is the least-friction route. Microsoft already has your data (your emails, your documents), so adding Copilot doesn't introduce a new party.

ChatGPT. Since Plus, input is no longer used for model training, which is an important guarantee. But hosting stays in the US by default, unless you're on Enterprise or API with EU data residency. For customer data, personal data or contracts inside a regular ChatGPT Team account, that's a watch point.

Not black and white: ChatGPT on a Team licence is safer than a free chatgpt.com account, but less locked down than Copilot in M365 Enterprise. What fits your business depends on the kind of data you handle.

For a deeper overview of AI choices alongside these two, see ChatGPT alternatives for SMB.

AI literacy: regardless of your choice

From February 2025, the AI Act (article 4) requires your employees to be AI-literate when they use AI at work. That applies to Copilot, to ChatGPT and to everything in between. Buying an expensive tool without your team knowing what sensible prompts look like, what they may and may not put in, and how to critically assess output, is wasted money and a compliance risk.

So make sure there's basic training at introduction. Not a three-day workshop, just half a day where the team learns: what can I do with it, what not, what are the rules in our company, how do I write a useful prompt? See AI Act article 4 for SMBs for the legal background, and AI training for your team for how we do this.

Frequently asked questions

Which is better for SMBs: Copilot or ChatGPT?

Neither is universally better. Copilot is stronger if you run on Microsoft 365 and work a lot in Office. ChatGPT is stronger for creative writing, image and open conversations. Most SMBs in practice benefit from both, not one.

Can I use both at the same time?

Yes, and that's often the smartest move. Copilot for productivity inside Office, ChatGPT for creative and open work. Costs go up a bit, but the productivity gain per employee is usually clearly larger than the subscription difference.

Which is safer for GDPR?

Microsoft Copilot is the most GDPR-friendly out of the box for SMBs, because it has EU hosting via Azure by default and data stays inside your tenant. ChatGPT requires Enterprise or an API implementation with the EU data residency option to reach the same level. For customer data or sensitive business information, that distinction matters.

Does Copilot work without Microsoft 365?

Microsoft 365 Copilot needs an M365 licence (E3 or E5) to deliver its value. Microsoft does offer separate Copilot Pro and Copilot Business for customers without full M365, but you then miss the native integration with Word, Excel and Teams that's the main reason to pick Copilot.

Does ChatGPT have Excel integration?

Not native like Copilot, but through Advanced Data Analysis (built into ChatGPT Plus and Team) you can upload Excel or CSV files and have them analysed. It just doesn't work inside Excel itself: you go from Excel to ChatGPT and back. For people who live in Excel, Copilot remains more practical.

What does Copilot cost for 20 employees?

Microsoft 365 Copilot starts from around $30 per user per month. For 20 employees that's roughly $600 per month, on top of your existing M365 subscription. Cheaper variants like Copilot Business can reduce that figure. Check current pricing, since Microsoft adjusts it regularly.

Which is better for writing?

For pure copywriting and creative writing, ChatGPT (or Claude) is generally stronger than Copilot. Copilot is good for business writing in Word with context, but for blog posts, marketing copy or longer creative pieces, the pure chat tools usually deliver more natural results.

Which one fits your business?

The choice between Copilot and ChatGPT (or both) depends on where your employees work, how sensitive your data is, and what kind of work you do. At DataDream we help SMBs with this decision: which combination, how to roll it out, how to make it GDPR-proof, and how to bring your team along.

Not sure which fits? Take the free AI Scan to see where your biggest opportunities are, or request an AI Quickscan for use-case-specific advice.