Microsoft Copilot Security and Deployment Controversies
New reporting highlighted a prompt-injection phishing risk in Microsoft Copilot after Permiso researchers found that attacker-controlled text embedded in emails could manipulate Copilot-generated summaries through cross-prompt injection attacks. The issue could cause Copilot to present deceptive security alerts or malicious instructions inside a trusted Microsoft 365 interface, increasing the likelihood that users will believe and act on attacker content. Separate coverage also noted broader security and privacy concerns around Microsoft’s AI ecosystem, including criticism of Windows Recall for capturing and storing snapshots of user activity that Copilot can analyze, even after Microsoft added stronger protections following earlier backlash.
Microsoft also faced continued scrutiny over how aggressively it is pushing Copilot into user environments. The company temporarily halted plans to automatically install the Microsoft 365 Copilot app on eligible Windows systems outside the EEA, though existing installations remain in place and administrators can still deploy it manually. Public criticism of Copilot’s quality and Microsoft’s AI strategy also spilled into the company’s Discord community, where moderation actions against users mocking “Microslop” drew further attention to dissatisfaction with rushed AI integration, privacy concerns, and the perception that Microsoft is forcing AI features into products despite unresolved trust and security issues.
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Microsoft Copilot Security Research: Prompt-Injection Phishing Risk and Copilot Studio Audit-Logging Gaps
Security researchers reported two distinct Microsoft Copilot-related risks: (1) **cross prompt injection** against *Microsoft Copilot* email summarization surfaces that can cause attacker-supplied text in an email to be treated like instructions, shaping the summary into a convincing in-product “security alert” and creating a phishing path that does not rely on attachments or macros; and (2) **audit-logging gaps in Microsoft Copilot Studio** where certain administrative actions for Copilot Studio agents (e.g., around sharing, authentication, logging, and publication) were not consistently recorded in Microsoft 365’s Unified Audit Log, potentially reducing defenders’ ability to detect malicious or unauthorized agent changes. Permiso described how Copilot’s behavior varies across Outlook’s inline *Summarize* experience, the Outlook Copilot pane/add-in, and Teams-based summarization, with the core risk being **trust transfer**—users may treat Copilot output as system-generated even when it is attacker-influenced—and warned that retrieval across Microsoft 365 (Teams/OneDrive/SharePoint) could amplify impact if chained. Datadog Security Labs stated it reported Copilot Studio logging issues to **MSRC**, that Microsoft remediated logging for the affected events by **October 5, 2025**, and that Datadog later observed a **regression** where some events again failed to log consistently, which it also reported to Microsoft.
5 days agoNovel Attacks Exploit Microsoft Copilot and Copilot Studio for Data Theft and OAuth Token Compromise
Security researchers have identified two distinct attack techniques targeting Microsoft's AI-powered platforms. The first, dubbed **CoPhish**, leverages Microsoft Copilot Studio agents to deliver fraudulent OAuth consent requests through legitimate Microsoft domains, enabling attackers to steal OAuth tokens. By customizing Copilot Studio chatbots and exploiting the platform's "demo website" feature, attackers can trick users into authenticating with malicious applications, potentially granting unauthorized access to sensitive resources. Microsoft has acknowledged the issue and is working on product updates to mitigate the risk, emphasizing the need for organizations to strengthen governance and consent processes. Separately, a vulnerability in Microsoft 365 Copilot was discovered that allowed attackers to use indirect prompt injection via Mermaid diagrams to exfiltrate sensitive tenant data, such as emails. By embedding malicious instructions in seemingly benign prompts, attackers could manipulate Copilot to retrieve and encode confidential information. Although Microsoft has since patched this flaw, the incident highlights the emerging risks associated with integrating AI assistants and third-party tools, as well as the challenges in securing complex, automated workflows within enterprise environments.
4 months ago
Microsoft expands Microsoft 365 Copilot data controls and cross-product data access settings
Microsoft is tightening and clarifying how **Copilot** can access and process user and organizational data across the Microsoft ecosystem. Microsoft is expanding **Purview Data Loss Prevention (DLP)** enforcement so policies that block Copilot from processing restricted/sensitivity-labeled content will apply not only to files in **SharePoint** and **OneDrive**, but also to **locally stored** Word, Excel, and PowerPoint documents. The change is planned for deployment via the *Augmentation Loop (AugLoop)* Office component between late March and late April 2026, and is expected to be automatically enabled for organizations already configured to block Copilot from processing labeled content; Microsoft says the update works by allowing the Office client/AugLoop to read sensitivity labels directly rather than relying on Microsoft Graph calls tied to SharePoint/OneDrive URLs. Separately, a Copilot “Memory” setting labeled **“Microsoft usage data”** has been reported as enabling Copilot to reference data from other Microsoft products (including **Bing, MSN, and Edge**) to personalize conversations, with an option for users to disable it if they have privacy concerns. A third, unrelated Microsoft 365 issue—an acknowledged bug in **classic Outlook** that can cause the mouse pointer to disappear—does not materially relate to Copilot data access or DLP controls and appears to be a usability defect rather than a security event.
2 weeks ago