📂 Course: AB-650: Administering Microsoft 365 and AI Services 📦 Module: 7 of 9 🎯 Exam: AB-650 📑 Domain: 3 — Manage and Secure AI Services in M365 (35–40%) ⌛ Read time: ~32 min
AB-650 Exam Alignment AB-650
Domain 3 — Administer Microsoft 365 Copilot: assess tenant readiness for Copilot including in-app experiences; identify and resolve data readiness issues (leaks, oversharing, compliance gaps); manage Copilot web search and Copilot Chat settings; configure Microsoft 365 Copilot Search; configure tenant settings for AI (self-service purchases, release preferences, AI disclaimer, video and image generation); manage Copilot user experiences — Cowork, third-party AI providers, and connectors.
Know the Copilot tenant readiness assessment — available in M365 Admin Center → Copilot → Readiness
Understand Restricted SharePoint Search — a Copilot-specific setting that limits which SharePoint sites Copilot can search to an approved allow-list
Know the difference between Copilot Chat (web grounding) and M365 Copilot Chat (work grounding via Microsoft Graph)
Understand Microsoft 365 Copilot Search — a Copilot-powered search experience that replaces classic SharePoint and M365 search for licensed users
Exam Tip: AB-650 Domain 3 is the most heavily weighted and the most unique content vs MS-102. Know the Copilot readiness assessment steps in order: (1) licence check, (2) data readiness (oversharing), (3) network readiness, (4) device/app readiness (M365 Apps on Current Channel). These four areas are tested as a complete workflow.
Module 7 covers the Microsoft 365 Copilot administrative tasks that make up the core of AB-650 Domain 3. This is entirely new territory compared to MS-102 — Copilot administration requires assessing whether the tenant’s data, network, and device posture is ready for AI, then configuring Copilot experiences, web search behaviour, Copilot Search, and tenant-wide AI policy settings before rolling out to users.
🎬 Copilot Tenant Readiness Assessment
Before enabling Copilot for users, administrators should verify the tenant meets the readiness criteria. The Copilot readiness report in the M365 Admin Center provides a structured assessment across four dimensions.
Readiness Area
What to Check
Admin Center Location
1. Licence readiness
Users have Microsoft 365 Copilot add-on licence assigned. Base M365 plan (E3/E5/Business Premium) must be assigned first.
M365 Admin Center → Copilot → Readiness → Licences
2. Data readiness
No widespread oversharing of sensitive data — check “Anyone” shared links, sites with excessive external sharing, sensitive data without labels. Review SharePoint DAG reports.
SharePoint Admin Center → Reports → Data access governance
3. Network readiness
Exchange Online TCP latency <25ms, DNS <5ms. Copilot is latency-sensitive — poor networks degrade AI response times.
M365 Admin Center → Health → Network connectivity
4. Device & app readiness
Microsoft 365 Apps must be on Current Channel (not Semi-Annual Channel or Monthly Enterprise Channel). Users need the latest apps for Copilot features in Word, Excel, PowerPoint, Outlook, Teams.
M365 Admin Center → Copilot → Readiness → Apps
📑 Restricted SharePoint Search
Restricted SharePoint Search (RSS) is a Copilot-specific configuration that limits which SharePoint sites appear in Copilot responses and Microsoft 365 Copilot Search. Instead of searching all SharePoint content the user has access to, Copilot only searches an administrator-approved set of sites.
🔥 Restricted SharePoint Search — AB-650 Must-Know
RSS is a Copilot feature — it is distinct from Restricted Content Discovery (SAM). RSS limits what Copilot can search; RCD excludes sites from the index entirely.
Configure in: M365 Admin Center → Copilot → Settings → Restricted SharePoint Search — toggle ON, then add approved site URLs to the allow-list
An RSS allow-list supports up to 100 SharePoint sites at initial rollout — expand as governance confidence increases
Recommended for the first 3–6 months of Copilot deployment while data governance issues are addressed
Once RSS is disabled, Copilot searches all SharePoint content the user has access to (the default, fully-expanded state)
M365 Admin Center› Copilot › Settings
☰ Microsoft 365 admin center | Copilot › Settings
Copilot
Readiness
Settings
Agents
Connectors
Usage
Tenant settings
Self-service purchases
Release preferences
Copilot Settings
Restricted SharePoint Search
Limit Copilot to approved SharePoint sites only
Enabled (47 sites)
Copilot Chat — Web search
Allow Copilot to search the web for current information
Enabled
AI-generated image creation
Allow Copilot to generate images in responses
Review required
🌐 Copilot Chat & Web Search Settings
Setting
What It Controls
Default
Web search for Copilot Chat
Whether Copilot can search the public web to supplement M365 data in responses. Enabled = Copilot can access current web information. Disabled = Copilot only uses M365 Graph data.
Enabled
Microsoft 365 Copilot Search
AI-powered search experience replacing classic M365 search for Copilot-licensed users. Can be configured to prioritise specific content types or restrict to specific content sources.
Enabled for licensed users
AI-generated images
Whether Copilot can generate images using DALL-E integration in responses. May require review for compliance in regulated industries.
Enabled
AI-generated videos
Whether Copilot can generate video content via Microsoft Clipchamp integration
Enabled
AI disclaimer
Display a disclaimer to users reminding them that Copilot-generated content may contain errors and should be reviewed
Configurable
Self-service purchases
Whether users can purchase Copilot or other AI add-ons with a credit card without admin approval
Enabled (by default — admins usually disable this)
Release preferences
Whether the organisation receives new Copilot features via Targeted Release (early access) or Standard Release
Standard Release
🔗 Connectors & Copilot Experiences
Feature
What It Is
Admin Location
Microsoft 365 Copilot Connectors
Integrations that bring external data into Copilot’s knowledge base — e.g. ServiceNow, Salesforce, Confluence, GitHub. Licensed users can query this data via Copilot.
M365 Admin Center → Copilot → Connectors
Cowork
A new Copilot experience (AI assistant in desktop app) that helps users manage tasks, meetings, and projects via AI. Replaces the standalone Copilot app in some scenarios.
M365 Admin Center → Copilot → Settings → Cowork
Third-party AI providers
Configure whether users can use non-Microsoft AI providers (e.g. OpenAI, Google Gemini) within M365 Copilot experiences. Admin can restrict to Microsoft-only AI.
M365 Admin Center → Copilot → Settings → AI providers
Microsoft Graph PowerShell — Copilot Administration
Connect-MgGraph-Scopes'User.Read.All'# Check which users have Copilot licence assigned$CopilotSku = Get-MgSubscribedSku | Where-Object {$_.SkuPartNumber -eq'Microsoft_365_Copilot'}
Get-MgUser-All-Property DisplayName,UserPrincipalName,AssignedLicenses |
Where-Object {$_.AssignedLicenses.SkuId -contains$CopilotSku.SkuId} |
Select-Object DisplayName,UserPrincipalName | Sort-Object DisplayName | Format-Table-AutoSize# Configure Restricted SharePoint Search (SPO PowerShell)Connect-SPOService-Url https://contoso-admin.sharepoint.com
# Enable Restricted SharePoint Search and add allowed sitesSet-SPOTenantCopilotSetting-RestrictedSharePointSearch$trueAdd-SPOTenantCopilotAllowedSite-SiteUrl'https://contoso.sharepoint.com/sites/Marketing'Add-SPOTenantCopilotAllowedSite-SiteUrl'https://contoso.sharepoint.com/sites/IT-Policies'# Review current RSS status and allowed sitesGet-SPOTenantCopilotSetting | Select-Object RestrictedSharePointSearch,AllowedSites
💡 Best Practices
Complete all four readiness checks (licence, data, network, app channel) before enabling Copilot for users — deploying Copilot to users with M365 Apps on Semi-Annual Channel results in Copilot features not appearing in Office apps
Enable Restricted SharePoint Search for the first 3–6 months of Copilot deployment — start with 10–20 well-governed sites and expand as confidence in data governance grows
Disable self-service purchases for AI add-ons — without this, users can purchase Copilot, Agent 365, and Copilot Studio directly with a credit card and bypass procurement processes
Use Targeted Release for a pilot group before enabling new Copilot features for all users — this gives the IT team time to test and document new features before widespread deployment
Configure the AI disclaimer to remind users that Copilot-generated content should be reviewed before use — important for regulated industries and any external communications
Review Copilot connector permissions carefully before enabling — connectors bring external system data into Copilot’s knowledge base, and misconfigured connectors can expose sensitive external system data to all Copilot users
🎓 Interview Q&A
Q: What is Restricted SharePoint Search and how does it differ from Restricted Content Discovery?
Restricted SharePoint Search (RSS) is a Copilot-specific tenant setting that limits which SharePoint sites Copilot can include in its responses and Copilot Search results. It operates via an allow-list — only sites on the approved list are included. By default (when RSS is disabled), Copilot can access all SharePoint content the user has permission to view. RSS is a temporary governance measure used during initial Copilot deployment while data readiness is improved. Restricted Content Discovery (RCD) is a SharePoint Advanced Management feature that excludes specific sites from Copilot and Microsoft Search entirely, regardless of user permissions — it’s applied per-site for sensitive sites you want permanently hidden from AI. RSS is a broad tenant-level safeguard; RCD is a targeted site-level exclusion.
Q: What are the four areas checked in the Copilot tenant readiness assessment?
The four Copilot readiness dimensions are: (1) Licence readiness — users must have a Microsoft 365 Copilot add-on licence and an eligible base plan (M365 E3/E5, Business Premium, or F3). (2) Data readiness — the tenant must not have widespread oversharing of sensitive data. Review SharePoint Data Access Governance reports and resolve “Anyone” links and external sharing issues that could expose sensitive data via Copilot. (3) Network readiness — Exchange Online TCP latency must be under 25ms and DNS resolution under 5ms. Copilot is latency-sensitive because it makes real-time calls to the Microsoft Graph semantic index. (4) App readiness — Microsoft 365 Apps (Word, Excel, PowerPoint, Outlook, Teams) must be on the Current Channel update track — Copilot features are not available in Semi-Annual Channel.
Q: What is the difference between Copilot Chat (web) and Microsoft 365 Copilot Chat (work)?
Copilot Chat (web) is the public consumer-facing AI chat at copilot.microsoft.com — it uses web search and public information, with no access to organisational M365 data. It is available to anyone with a Microsoft account. Microsoft 365 Copilot Chat (work mode) is the enterprise version available to users with a Microsoft 365 Copilot licence — it grounds responses in the organisation’s M365 data via the Microsoft Graph semantic index (emails, meetings, Teams chats, SharePoint documents). When an administrator configures “web search for Copilot Chat”, they are controlling whether the work-mode Copilot Chat can supplement its M365 data grounding with web search results. This setting does not affect the public Copilot Chat at copilot.microsoft.com.
Copilot has been licensed for 200 users, but many report that the Copilot button does not appear in Word or Excel. All users have Microsoft 365 E3 licences and the Copilot add-on. What is the most likely cause?
AThe Copilot licence has not propagated yet — wait 48 hours for the licence assignment to activate
BRestricted SharePoint Search is enabled, preventing Copilot from appearing in Office apps
CThe users need Microsoft 365 E5 as their base plan for Copilot to appear in Office applications
DMicrosoft 365 Apps are on the Semi-Annual Channel instead of Current Channel — Copilot features require Current Channel
✅ Correct: D. Microsoft 365 Copilot features in Word, Excel, PowerPoint, Outlook, and Teams require Microsoft 365 Apps on Current Channel. The Semi-Annual Channel lags Current Channel by 6+ months — Copilot features are not included. This is one of the most common deployment issues. Resolution: change the update channel to Current Channel via Microsoft 365 Apps Admin Center or Intune. M365 E3 (C) is a supported base plan. RSS (B) limits SharePoint search scope but doesn’t hide the Copilot button. 48-hour propagation (A) is not the issue if licences are already assigned.
Question 2 of 5
An organisation is preparing for a Copilot rollout and the compliance team is concerned about oversharing. The administrator wants Copilot to only access a controlled set of SharePoint sites during the initial 3-month rollout. Which feature should they configure?
AApply Restricted Content Discovery (RCD) to all SharePoint sites except the approved ones
BEnable Restricted SharePoint Search and add the approved SharePoint site URLs to the allow-list
CCreate DLP policies for all SharePoint sites to block Copilot access
DRemove SharePoint permissions for all users and re-grant only approved site access
✅ Correct: B.Restricted SharePoint Search is specifically designed for this scenario — it limits Copilot’s SharePoint access to an administrator-defined allow-list of approved sites without changing permissions or adding site-level configuration. It’s the recommended approach during initial Copilot rollout. Option A (RCD) applies per site and is better for permanently excluding specific sensitive sites — applying it to hundreds of sites to achieve the inverse is impractical. DLP (C) can block Copilot from surfacing specific data types but doesn’t control which sites Copilot searches. Option D would break existing user workflows.
Question 3 of 5
An administrator wants to prevent users from purchasing Microsoft Copilot Studio independently with a personal credit card to build agents without IT approval. Which setting should they configure?
ADisable self-service purchases for Copilot Studio in the M365 Admin Center under Billing → Purchase services settings
BCreate a Conditional Access policy blocking access to copilotstudio.microsoft.com
CApply a DLP policy targeting Microsoft Copilot Studio as a location
DConfigure the Copilot Studio tenant settings to require admin approval for all new agents
✅ Correct: A.Self-service purchase controls in M365 Admin Center (Billing → Purchase services → Self-service sign-up and purchasing) allow administrators to disable self-service purchasing for specific products including Copilot Studio, Agent 365, and Microsoft 365 Copilot. When disabled, users see a message directing them to IT when they try to purchase. Conditional Access (B) can block the portal but doesn’t prevent licence purchase through other channels. DLP (C) is for data protection, not procurement control. Copilot Studio admin approval (D) governs agent publishing, not licence purchase.
Question 4 of 5
A finance manager asks why Copilot Chat responses sometimes include information from news websites and current events, not just internal company data. What Copilot setting is responsible for this behaviour?
AMicrosoft 365 Copilot Search — extends search to public web content by default
BThird-party AI providers — external AI models can search the web independently
CWeb search for Copilot Chat — this setting allows Copilot to supplement M365 data with public web information
DCopilot connectors — web search connectors bring public content into Copilot’s knowledge base
✅ Correct: C.Web search for Copilot Chat (enabled by default) allows Microsoft 365 Copilot Chat to supplement its responses with public web information via Bing web search. This is why Copilot can answer questions about current news, stock prices, or publicly available information — not just internal M365 data. If the organisation wants Copilot Chat to use only internal M365 data (Graph-grounded responses only), the admin can disable web search in M365 Admin Center → Copilot → Settings. Copilot Search (A) is the search experience, not a web data feed. Third-party providers (B) and connectors (D) are different features.
Question 5 of 5
An organisation wants its 50-person IT team to receive new Copilot features early — 3 months before the general employee population — so they can prepare documentation and support resources. How should this be configured?
AAssign the IT team a Microsoft Defender for Office 365 Plan 2 licence which includes preview features
BConfigure Targeted Release for the IT team in M365 Admin Center → Settings → Org settings → Release preferences → Selected users
CAssign the IT team a Microsoft 365 E5 Developer licence to access preview features
DAdd the IT team to the Microsoft Insider Programme via insider.microsoft.com
✅ Correct: B.Targeted Release (Selected users) in M365 Admin Center → Settings → Org settings → Release preferences allows administrators to specify individual users or groups who receive new M365 features early — approximately 2–4 weeks before Standard Release (not 3 months, but early access varies by feature). Adding the IT team to Targeted Release ensures they see and can test new Copilot features before general availability. This setting is per-tenant and controls M365 Admin Center and M365 app feature rollout cadence — not related to licence type (A, C) or consumer preview programmes (D).
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