Copilot Agent Builder vs Copilot Studio: Differences and New Features

With the unstoppable momentum of artificial intelligence in the business environment, Microsoft has launched personalized AI agents as a new way of interacting with technology. In this context, two tools stand out within the Microsoft ecosystem: Copilot Agent Builder and Copilot Studio.

But what exactly are they? What are they used for? How do they differ? And most importantly, what new features do they introduce following the announcements at Microsoft Build 2025?

In this article, we take an informative, business-oriented look at both tools—exploring their key features, core differences, ideal use cases, and the most significant new capabilities that will shape their evolution throughout the year.

Initially, Microsoft 365 Copilot is integrated into applications like Word, Excel, PowerPoint, Outlook, and Teams, helping business users with specific tasks, such as summarizing an email thread, generating a draft presentation, or analyzing data in Excel.

But Copilot goes far beyond these predefined features. The platform enables the creation of custom Copilot AI agents that can be tailored to adapt to each company's specific needs. These Copilot Agents are intelligent assistants trained on a company’s internal data to address specific business scenarios.

This means a company can deploy its own personalized Copilot agent to do things like check the status of an order in its systems or answer employees’ frequently asked questions using corporate information.

What is Copilot Agent Builder?

Copilot Agent Builder is a Microsoft 365 tool that allows you to create custom AI agents without programming.

Definition and purpose of Copilot Agent Builder

Copilot Agent Builder is a feature within Microsoft 365 Copilot that empowers any business user to create custom AI agents—no coding required. These agents can answer questions, offer recommendations, and automate routine tasks by leveraging information from documents or personal data.

Agent Builer: How Does It Work?

Agent Builder follows a low-code/no-code approach, meaning any non-technical business user can easily create their own AI agent. Using a highly intuitive interface, users can add knowledge sources such as PDF files, Word documents, web pages, or SharePoint links.

The process is as simple as:

• Define the agent’s purpose – for example, “Answer questions about the company’s expense policy.”
• Add knowledge sources – upload PDFs, Word files, internal documents, or links.
• Publish and activate the agent – directly from the Microsoft Copilot app within your Microsoft 365 suite.

Agent Builder is designed to work seamlessly within the native Microsoft 365 environment, making it accessible to any user with an active Copilot license. Everything is managed through a visual, user-friendly interface—no coding required.

Find out how to implement Copilot Agent Builder with step-by-step instructions in our free guide!

What is Microsoft Copilot Studio?

Copilot Studio is an advanced development platform for building enterprise-grade AI agents with seamless integration across multiple systems

Copilot Studio Definition and Capabilities

Copilot Studio is Microsoft's professional platform for building and managing advanced AI agents. It is an evolution of Power Virtual Agents, now integrated as a key part of the Power Platform.

It is ideal for companies that need complex, customized AI solutions.

Unlike Copilot Agent Builder, Copilot Studio allows you to design complex conversational experiences, connect external systems, use conditional logic, deploy agents across multiple channels (such as Teams, Web, WhatsApp) and analyze their performance.

How It Works and What It Offers

Copilot Studio is part of Power Platform and offers:

• Visual designer of conversation flows.
• Integration with Power Automate, databases and APIs.
• Granular knowledge analysis and control modules.
• Deployment in multiple environments, including external channels.

Source: Microsoft

It’s designed for IT teams, developers, and organizations that need to build scalable AI solutions fully aligned with their business processes.

• You may also be interested in: Comparative Guide: Microsoft Copilot vs ChatGPT vs Gemini AI

Differences Between Copilot Agent Builder and Copilot Studio

The main difference between Copilot Agent Builder and Copilot Studio is the degree of complexity: Agent Builder is designed for creating simple AI agents, while Copilot Studio is intended for developing advanced, enterprise-grade solutions.

Although both tools allow you to create AI agents, their approach, capabilities and use cases are very different.

Below, we explore the key differences between Copilot Agent Builder and Copilot Studio:

1. Scope and Complexity of Agents

• Agent Builder is oriented to simple agents that act as personal assistants. It is ideal for automating common tasks or providing support within a department.
• Copilot Studio allows you to create agents with advanced logic, complex rules and multiple integrations, capable of operating as true "enterprise copilots".

2. Advanced Functionalities

• Agent Builder is limited to contextual responses based on documents and data from the Microsoft 365 environment.
• Copilot Studio enables actions, API calls, complex workflows and interaction with multiple external sources.

3. Ease of Use vs. Flexibility

• Agent Builder is extremely easy to use. It is designed for non-technical users.
• Copilot Studio requires more learning, but offers far superior flexibility and power.

4. Integration and Data

• Agent Builder works with the user's personal data (Outlook, Teams, OneDrive, SharePoint).
• Copilot Studio can integrate with corporate databases, ERP systems, CRM, external applications and other platforms.

5. Deployment and Licensing

• Agent Builder is included with the Microsoft 365 Copilot license and requires no installation or special permissions.
• Copilot Studio must be explicitly enabled within the tenant and is built on the Power Platform, which may involve additional licensing costs.

Want to know which Copilot solution is right for your team? Discover the key differences between Copilot Agent Builder and Copilot Studio —plus real use cases by department— in our free guide: "Practical Guide: How to Deploy Copilot Agents in Your Enterprise".

What's New in Microsoft Build 2025 for Copilot Agents

What's New in Copilot Agent Builder? (Build 2025)

At Microsoft Build 2025, several key enhancements to Agent Builder were announced—making it even more powerful and user-friendly:

• Full-screen editing for a more comfortable and focused experience
• Drag-and-drop file uploads, including PDFs and Word documents
• Contextual access to personal data from Outlook, Teams, Calendar, and SharePoint

These updates make it easier than ever for any user to create a custom AI agent in just minutes—no technical skills required—directly within their Microsoft 365 environment.

What's New in Copilot Studio? (Build 2025)

Copilot Studio takes a major leap forward by introducing advanced enterprise capabilities designed for large-scale AI deployments:

• Multi-agent orchestration to coordinate and delegate tasks across multiple agents
• UI automation, offering functionality similar to intelligent RPA
• Granular knowledge control, with source- and model-level policy management
• Enhanced usage analytics, providing detailed performance and engagement metrics

With these features, Copilot Studio positions itself as a world-class enterprise AI solution built to handle complex, large-scale scenarios with precision and flexibility.

When to Use Agent Builder vs. Copilot Studio

Use Agent Builder if you are looking for speed and simplicity.
Choose Copilot Studio if you need scalability and advanced automation.

The decision depends on the level of complexity, user profile and agent objectives. As a quick guide:

Choose Copilot Agent Builder if:

• You want to create a fast, no-code agent.
• You only need to answer frequently asked questions or provide access to documents.
• Your users are non-technical employees.
• You don't need external integrations.

Choose Copilot Studio if:

• You need to connect systems or automate business flows.
• You require full control over data sources and agent behavior.
• You are looking to deploy agents in multiple channels.
• You have an IT or technical team that can lead the implementation.

Best Practices for Deploying Copilot Agents

To unlock the full potential of Copilot agents, should follow these best practices:

• Define a clear purpose for each agent – Effective agents are built to solve specific needs, such as onboarding, support, or data analysis.
• Choose the right tool based on your organization’s digital maturity – Use Agent Builder for simple scenarios and Copilot Studio for advanced use cases.
• Secure sensitive data – Set up access controls and permissions carefully to protect critical information.
• Start with pilot testing – Roll out agents to small user groups first to validate functionality and gather early feedback.
• Monitor and optimize – Track usage, gather insights, and refine your agents continuously based on performance metrics and user input.

Frequently Asked Questions (FAQs) About Copilot Agent Builder & Copilot Studio

Conclusions

Copilot Agent Builder and Copilot Studio offer two distinct paths for creating custom AI agents—each with its own approach.

Agent Builder democratizes development, empowering non-technical users to create useful assistants with ease. Meanwhile, Copilot Studio enables the design of sophisticated, scalable AI solutions tailored for enterprise needs.

The enhancements unveiled at Microsoft Build 2025 only deepen this duality:
While Agent Builder becomes even more accessible and seamlessly integrated into everyday workflows, Copilot Studio strengthens its position as a powerful platform for building enterprise-grade conversational AI.

So which one is right for your organization?
That depends on your objectives, available resources, and digital maturity. But one thing is clear: the future is moving toward a growing ecosystem of specialized AI agents—working together to boost productivity and drive business automation.

Ready to build your own Copilot agent tailored to your organization?

At Bismart, we help companies identify high-impact use cases, design custom prototypes, and deploy Copilot solutions that align with their unique needs.

Get in touch with us and take the next step toward real-world AI adoption.