Microsoft Copilot bug saw AI snoop on confidential emails — after it was told not to

Microsoft's Copilot has been found reading and summarizing email messages despite "confidential" labels that should prevent the AI system from accessing the data.

The tech giant issued a warning about a bug in the Microsoft 365 Copilot "work tab" Chat which allows the AI to incorrectly process messages that should be skipped due to sensitivity labels.

In a message shared to affected users, Microsoft said a code issue meant emails in the sent items and draft folders were being picked up despite policies in place that meant messages with confidential labels shouldn't be read.

"We identified and addressed an issue where Microsoft 365 Copilot Chat could return content from emails labeled confidential authored by a user and stored within their Draft and Sent Items in Outlook desktop," a spokesperson told ITPro.

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"This did not provide anyone access to information they weren’t already authorized to see. While our access controls and data protection policies remained intact, this behavior did not meet our intended Copilot experience, which is designed to exclude protected content from Copilot access".

The spokesperson added that a "configuration update" has been deployed for customers globally.

The issue was first spotted on 21 January, and tracked by Microsoft as CW1226324.

Microsoft Copilot Chat rules

Copilot Chat is Microsoft's tool for interacting with an AI agent directly from Word and other productivity software. It first rolled out in September.

Microsoft 365 Copilot reads through data such as emails, documents, chats, and more to help dig information out for users.

With privacy in mind, Microsoft built in administrative controls that let companies keep AI away from sensitive material — but this bug meant those rules were not applied in Sent Items and Drafts folders in email, letting Copilot access all emails for summarization despite being labelled confidential.

AI security risks

The rise of generative AI use in businesses has sparked concerns about the security risks, be it breaching confidentiality guidelines in sensitive industries, leaking private data, or offering a new attack vector via prompt injections or other hacking techniques.

Researchers have already spotted thousands of corporate secrets in one popular AI training dataset, suggesting industry is struggling to keep up with the realities of data security in the AI era.

The risk is exacerbated by shadow AI, when employees use AI chatbots or other tools without official approval or IT department support, meaning data-protection guidelines aren't in place to protect private or sensitive information.

That's already causing a huge surge in data policy violations, according to a report from Netskope, with almost a third of workers already using AI covertly at work.

There have been previous issues with Copilot. Back in 2024, academic researchers spotted security vulnerabilities in retrieval augmented generation (RAG) systems used by Microsoft Copilot that could lead to such tools committing confidentiality violations.

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