Microsoft Copilot file upload and reading: document access, Graph-based retrieval, and workflow behavior for late 2025/2026

Graziano Stefanelli
1 hour ago
3 min read

Microsoft Copilot approaches file upload and document reading in a structurally different way compared to standalone AI assistants, placing document access at the center of the Microsoft 365 ecosystem rather than treating files as temporary chat attachments.

This design choice affects how files are ingested, how long they remain accessible, and how Copilot reasons over documents across consumer and enterprise environments.

Here we share how Microsoft Copilot handles file upload and reading in practice, which platforms support which behaviors, and how memory, permissions, and analysis depth differ as Copilot matures through late 2025 and early 2026.

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File access in Microsoft Copilot depends on the product surface rather than a single upload mechanism.

Microsoft Copilot does not rely exclusively on manual file uploads.

Instead, its strongest document-reading capabilities emerge when files already exist inside Microsoft 365 services such as OneDrive, SharePoint, Outlook, and Teams.

This creates a clear distinction between consumer Copilot experiences and enterprise Copilot deployments.

Understanding this distinction is essential to evaluating Copilot’s real capabilities.

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File access methods across Microsoft Copilot products

Copilot surface	File access method	Persistence
Copilot (consumer)	Manual upload	Session-only
Microsoft 365 Copilot	Microsoft Graph retrieval	Persistent via source
Copilot Studio	Indexed data sources	Persistent and configurable

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Consumer Copilot supports direct file uploads with session-bound analysis.

In the consumer Copilot interface, users can upload files directly into a chat session.

Supported formats include PDF, DOCX, PPTX, XLSX, and plain text files.

These files are analyzed only for the duration of the active conversation.

Once the session ends, Copilot no longer retains awareness of the uploaded documents.

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Microsoft 365 Copilot reads files through Microsoft Graph rather than direct upload.

Microsoft 365 Copilot accesses documents using Microsoft Graph, which connects to OneDrive, SharePoint, Outlook, and Teams.

Files do not need to be re-uploaded if they already exist within the tenant.

Copilot dynamically retrieves relevant documents based on user prompts and permissions.

This retrieval model allows Copilot to reference documents repeatedly across sessions without storing its own copy.

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Permission-aware retrieval defines Copilot’s security model.

Copilot can only access files the user already has permission to view.

Document access respects tenant boundaries, sharing rules, and access controls.

Copilot does not bypass permissions or infer access beyond what Microsoft Graph allows.

This ensures that AI-driven file reading remains compliant with enterprise security requirements.

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Document reading capabilities extend beyond raw text extraction.

For Office-native formats, Copilot understands document structure rather than treating files as plain text.

It can interpret headings, tables, lists, formulas, and slide layouts.

Copilot can summarize documents, extract key points, compare multiple files, and generate follow-up content grounded in document context.

This structural awareness is strongest for DOCX, XLSX, and PPTX formats.

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Spreadsheet reading is most powerful inside Excel environments.

Within Excel, Copilot can interpret tables, columns, and formulas.

It can explain calculations, summarize trends, and suggest visualizations using natural language prompts.

Very large spreadsheets may be summarized rather than fully processed.

Macros and complex scripts are typically ignored or flattened during analysis.

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Spreadsheet handling behavior in Copilot

Capability	Behavior
Table understanding	Native
Formula explanation	Supported
Trend summaries	Supported
Macro execution	Not supported

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PDF handling varies with document structure and quality.

Text-based PDFs are parsed reliably and can be summarized or queried effectively.

Scanned PDFs rely on OCR quality, which may affect accuracy.

Complex layouts, dense tables, or embedded graphics can result in partial interpretation.

Copilot treats PDFs primarily as reference documents rather than analytical datasets.

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Copilot Studio enables persistent and reusable file knowledge.

Copilot Studio allows organizations to define persistent knowledge sources.

Files stored in SharePoint libraries or external connectors can be indexed and reused across sessions.

This enables retrieval-augmented generation workflows and repeatable AI behavior.

Governance, refresh schedules, and scope control are configurable by administrators.

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Memory behavior is explicit and controlled rather than implicit.

Consumer Copilot forgets uploaded files when sessions end.

Microsoft 365 Copilot does not “remember” files but re-retrieves them on demand from their original locations.

Copilot Studio supports persistent references through configured data sources rather than hidden memory.

This design avoids unexpected data retention while enabling continuity.

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Microsoft Copilot’s file reading favors organizational context over raw capacity.

Copilot is optimized for environments where documents already live inside structured systems.

Its strength lies in contextual relevance, permissions, and integration rather than maximum file size or token depth.

For users working inside Microsoft 365, this approach reduces friction and improves trust.

Understanding these mechanics clarifies when Copilot excels and when other AI platforms may be more suitable.

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DATA STUDIOS

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[datastudios.org]