M365 Copilot | Claude in Copilot

Those in the EU who enable Claude models in Microsoft Copilot currently bring a documented exception into their environment. Microsoft Learn lists Claude in Copilot, Researcher, Copilot Studio, Power Platform, and Copilot in Microsoft 365 apps (as of November 4, 2026) as exempt from the EU Data Boundary and from in-country processing commitments.

That is why the switch is off by default in the EU, EFTA, and the UK.

On November 5, 2026, Charles Lamanna, Executive Vice President for Copilot, Agents, and Platform, announced in the Microsoft Copilot Blog that by the end of 2026, organizations in the EU and EFTA will be able to use Claude in Copilot—including Copilot Cowork—with processing within the EU Data Boundary. Claude is already available in Copilot Chat, Copilot in Microsoft 365 apps, Cowork, and Copilot Code. The model offering remains the same; only the processing location will change.

If you’ve already enabled Claude, no action is required: According to Microsoft, processing will automatically switch to the Boundary as soon as it’s available. Without activation, the default remains in place.

Only users with the AI Administrator or Global Administrator role can enable this. In the Microsoft 365 Admin Center, go to Copilot > Settings > View all, then select 'AI providers operating as Microsoft subprocessors'. Choose Anthropic as the subprocessor and specify whether all users or only selected users and groups should have access. For a start, a pilot group as an Entra ID security group is sufficient, as the assignment at the provider level applies to both Copilot and Copilot Studio.

Until the switch is made, the exception remains in effect. If you release Claude now, the processing outside the boundary must be recorded in the DSFA and processing directory, with a follow-up for when Microsoft announces the transition.

Microsoft does not specify an exact date, only stating "by the end of 2026." It also remains unclear whether Claude will later fall under the commitments for in-country processing. The announcement only mentions the storage of data at rest for the ten EU and EFTA countries.

The "Anthropic models with Data Retention" – such as Claude Fable 5 and Claude Mythos 5, according to Learn – are not mentioned in the announcement. They are subject to Anthropic’s own terms and privacy agreement, with Anthropic acting as an independent processor and retaining most inputs and outputs for up to 30 days. Do not include them in the new commitment unless Microsoft explicitly confirms otherwise.

For organizations whose data protection review has so far hinged on the EU Data Boundary exception, the main argument against Claude in Copilot will be eliminated by the end of 2026. Until then, the exception remains the documented standard. Initially, release Claude to a pilot group, exclude the data retention models from the release, and after Microsoft’s announced detailed statement, verify which models and services the transition will cover.