AI Security for Small Businesses: How to Use Microsoft Copilot & ChatGPT—Safely

If your team is testing Microsoft Copilot or pasting questions into ChatGPT, you’re not alone. AI is showing up everywhere in small business workflows—from inbox triage to proposal drafts. The opportunity is real, but so are the risks: accidental data leaks, oversharing in prompts, or turning on a feature without the right guardrails. This guide explains how Copilot and ChatGPT handle data, what to configure before rollout, and practical steps to protect your business.

DEWW I.T. Solutions has helped many Victoria-area companies adopt AI without creating new security headaches. Here’s the short course.

Why AI security is a business issue (not just “IT stuff”)

Regulators and security agencies have been clear: if a tool touches customer or employee data, you’re expected to safeguard it. The FTC has pursued companies for weak data practices and misleading privacy claims; “AI” doesn’t grant a free pass. Treat AI vendors like any other cloud provider—read the fine print, set controls, and verify. Federal Trade Commission+1

Security agencies have also published practical AI guidance you can adapt to a small-business scale—think clear data handling rules, identity controls, logging, and a plan for misuse. CISA+1

If you prefer a framework to keep everyone honest, NIST’s AI Risk Management Framework (AI RMF) lays out a straightforward, vendor‑neutral approach to govern AI use—useful even for five‑to‑fifty‑person teams. NIST+1

How Microsoft Copilot handles your data (and what admins should do)

What Microsoft says about Copilot’s data use. For Microsoft 365 Copilot, prompts, responses, and data accessed via Microsoft Graph are not used to train the foundation models. Copilot respects your existing Microsoft 365 permissions, so a user only sees what they’re allowed to see—nothing more. Microsoft Learn

Where your data lives. Copilot interactions and the related semantic index are stored at rest within your tenant’s applicable region (“local region geography”). That matters for businesses with residency requirements or contracts that specify where data can sit. Microsoft Learn

Inside your tenant boundary. Copilot runs within the Microsoft 365 service boundary and uses Microsoft Graph to retrieve context based on user permissions. Conditional Access and MFA policies still apply. If your identity and access hygiene is solid, Copilot inherits that foundation; if it’s messy, Copilot will reflect that, too. Microsoft Learn

Controls you should enable. Use Microsoft Purview to apply labels/DLP, govern sharing, and monitor where sensitive content appears in Copilot prompts and outputs. Microsoft’s current guidance ties Copilot governance tightly to Purview and your existing compliance program. Microsoft Learn

Security posture. Microsoft documents a defense‑in‑depth approach for Copilot and outlines steps tenants can take to strengthen their AI security posture (for example: role‑based access, audit, and safe plugin/connector practices). Microsoft Learn

Bottom line for small businesses: Copilot can be deployed safely, but only if your Microsoft 365 basics are done right—least‑privileged access, MFA, conditional access, and data classification. If those are wobbly, fix them before rolling out Copilot broad‑scale. Microsoft Learn

How ChatGPT handles your data (free/Plus vs. Team/Enterprise)

Business plans vs. consumer plans. With ChatGPT Team and Enterprise, OpenAI states your business content (inputs and outputs) is not used to train their models by default; you retain ownership and get enterprise admin controls like SSO and retention options. Consumer accounts (Free/Plus) may use conversations to improve models unless you disable training in Data Controls. That difference is key for company use. OpenAI+1OpenAI Help Center+1

Security & compliance notes. OpenAI’s business pages highlight encryption in transit/at rest, SSO, configurable retention, and enterprise‑grade controls and attestations. Review these details during vendor due diligence and map them to your own policies. OpenAI

Admin visibility. ChatGPT Enterprise includes an analytics dashboard for adoption and usage trends—useful for spotting risky patterns or departments that need extra training. OpenAI Help Center

Bottom line for small businesses: If your team uses ChatGPT for work, strongly prefer Team or Enterprise over personal Free/Plus accounts, and turn on the admin controls you’re paying for. OpenAIOpenAI Help Center

What about “other AI tools”?

Treat every AI product like any SaaS vendor handling sensitive data: confirm where data is stored, whether prompts/outputs are used for training, what retention looks like, how identity/SSO works, and whether you get audit logs. The CISA/NSA best‑practice guidance is a good checklist to adapt for procurement and onboarding. CISA

The small‑business AI Security Starter Kit (10 practical guardrails)

• Classify your data and set rules for what can and cannot be pasted into prompts (customer PII, financials, health info, trade secrets).

• Require business accounts (Microsoft 365, ChatGPT Team/Enterprise) with SSO; block personal AI accounts on work devices.

• Turn on MFA, Conditional Access, and least‑privileged access before rolling out Copilot; don’t skip the basics.

• Use labels/DLP (Microsoft Purview) to stop sensitive data from leaving your tenant via prompts or AI‑generated content.

• Set data retention for AI chats and outputs; define where drafts can be stored (Teams/SharePoint) and for how long.

• Establish “prompt hygiene” guidelines (no client names if not needed, summarize instead of copy‑pasting raw records, remove identifiers).

• Limit high‑risk plugins/connectors; approve only those that meet your vendor standards and log their activity.

• Provide an “AI request path” for new tools—lightweight intake, risk check, and approval so Shadow AI doesn’t flourish.

• Train your people (15 minutes, quarterly) on safe use, examples of oversharing, and how to report odd AI behavior.

• Monitor and iterate: review audit/analytics monthly; tune policies and training based on what you see. Microsoft Learn+1OpenAICISANIST

How DEWW I.T. Solutions can help (and what it looks like)

We start with a brief readiness check of your Microsoft 365 tenant, identity policies, and data labels. Then we set sensible defaults for Copilot or ChatGPT Team/Enterprise, build a quick “AI acceptable use” guide tailored to your business, and schedule a short training so your staff can use AI with confidence. For most small businesses, the goal is pragmatic: unlock value fast, keep sensitive data out of prompts, and stay aligned with your contracts and regulators.

Contact us to get started!