What’s New in Microsoft 365 Copilot: January 2026 Update

Apologies for being a few weeks late, but all these updates have me behind. Microsoft 365 Copilot continues to evolve with powerful new features that are transforming how we work. This past January brought exciting updates across the platform. A special focus on agent capabilities, enhanced AI models, and improved admin controls. Let’s explore what’s new.

GPT-5.2 Powers Microsoft 365 Copilot

The biggest news this past month is the integration of GPT-5.2 into Microsoft 365 Copilot. This upgrade delivers stronger reasoning capabilities, faster everyday assistance, and deeper work-grounded insights—all while maintaining enterprise-grade security at scale.

What makes GPT-5.2 special is its dual approach: it combines advanced reasoning (GPT-5.2 Thinking) with fast, efficient assistance (GPT-5.2 Instant), ensuring you get the right model for every task. The new model uses Work IQ to reason across your meetings, emails, and documents for better insights, research, and planning. You can now select GPT-5.2 directly in Copilot Chat and Copilot Studio to power richer conversations and more capable agents.

Introducing Agent Mode: Your AI Co-Editor

One of the most interesting features rolling out this month is Agent Mode in Word, Excel, and PowerPoint. This represents a fundamental shift in how we work with AI—moving from simple question-and-answer to true collaborative editing.

What is Agent Mode?

Agent mode allows Copilot to work alongside you as an active co-editor, transparently reasoning through and applying changes to your documents, spreadsheets, and presentations. Unlike traditional AI assistance, agent mode gives you complete control and visibility into what Copilot is doing and why, enabling you to review and make course corrections at any point in the process.

How Agent Mode Works

The agent mode focuses on transparency and control. When you activate it, Copilot doesn’t just respond to your prompts; it actively edits and refines your files while showing its work. You can see the reasoning behind each change, understand what’s happening, and guide the process in real-time.

For Copilot Chat users, agent mode offers standard access with web grounding. For Microsoft 365 Copilot-licensed users, you get priority access with both web and work grounding, meaning the agent can leverage your organizational data to make more informed edits.

Create Complete Drafts from a Single Prompt

Building on agent mode, Microsoft has introduced Word, Excel, and PowerPoint Agents from Copilot Chat. These prompt-driven agents can generate complete, well-structured drafts from a single prompt, eliminating the dreaded blank page problem.

Simply describe what you need in Copilot Chat, and these agents will create:

• Word documents with rich structure and proper formatting
• Excel spreadsheets with data analysis and formulas
• PowerPoint presentations with cohesive design and content

This feature is rolling out in February for both standard Copilot Chat users and those with Microsoft 365 Copilot licenses.

Ground Agents on Notebooks

To make agents even more contextually aware, you can now ground agents on a Copilot Notebook. This ensures that agent responses stay tightly aligned with your specific working context and materials. By drawing directly from the references, notes, and working materials stored in your Notebook, agents deliver more consistent, tailored responses that reflect what you’re actually working on.

Outlook Mobile Voice Experience

Outlook mobile now offers an interactive voice experience that lets you catch up on emails hands-free. You can:

• Get voice summaries of unread emails
• Draft replies using voice commands
• Delete, archive, pin, or flag emails through voice
• Stay on top of your inbox while on the go

This feature rolled out on iOS in January and will arrive on Android in February.

Grounding in Outlook

Copilot Chat in Outlook now features **implicit grounding**, automatically using the email content you’re working on as context. The open email is added as a grounding source in the prompt box, and if you highlight specific text, grounding updates to use only that selected content. This eliminates manual copy-paste steps and makes your interactions more efficient.

Natural Language Email Actions

You can now perform common email triage tasks using natural language prompts in Copilot Chat. Mark emails as read or unread, pin or unpin them, flag or unflag, and archive. This works in both Outlook and the Microsoft 365 Copilot app.

What’s Coming Next

Looking at the Microsoft 365 roadmap, we can expect more exciting features in development, including:

• Agent mode expanding to PowerPoint
• Customizable Copilot tuning for organizations
• Enhanced memory features with work data
• Watermarks for AI-generated content
• Improved researcher output formats

Want to stay updated on the latest Copilot features? Visit the Microsoft 365 Copilot Blog or check the release notes for detailed information on all updates.

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• Don’t sleep on Copilot Chat
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The post What’s New in Microsoft 365 Copilot: January 2026 Update appeared first on Pat Petersen.

Original Post https://patpetersen.com/2026/02/17/copilot/