Generative AI explained

Generative AI is artificial intelligence that creates new content: text, images, code, music or video. You give an instruction in plain language (a prompt) and the model makes something that didn't exist before. Well-known examples are ChatGPT, Microsoft Copilot and Designer. This article explains in plain terms how it works, what you can do with it in Microsoft 365, where its limits are and how to use it safely at work.

Updated on 22 October 2026. Expanded with the differences between Microsoft's Copilot versions, an explanation of grounding and hallucinations, a simple prompt formula, points of attention for businesses and a short FAQ.

How does it work?

A generative model is trained on enormous amounts of text, images or code. It learns patterns: which word usually comes next, what a cat looks like, how a Python function works. Given a prompt, it predicts step by step what fits best. For text, such a model is called a large language model (LLM). So the model doesn't know things the way a person does; it produces a likely answer.

Two terms help you understand the results:

A prompt and the answer from generative AI in a chat window

What can you do with it?

An image made with generative AI from a text prompt

Generative AI in Microsoft 365

Microsoft uses the Copilot name for several products. The main difference is which data the model can use:

Generative AI in a Microsoft app

Write a good prompt

A handy formula: state your goal, give context, name the source the model should use and describe your expectations for format and tone. For example: "Write a short email to the team (goal) about the move to the new office (context), based on the Moving plan document (source), friendly and no more than five sentences (expectations)." More examples are in 15 useful prompts for ChatGPT and Copilot.

What to watch out for

FAQ

Is generative AI the same as ChatGPT?

No. ChatGPT is one application. Generative AI is the whole family of models that create text, images, audio or code.

Does Copilot learn from my company data?

With a work account, Microsoft doesn't use your prompts or organizational data to train its foundation models.

Will AI replace my job?

It mostly takes over repetitive tasks such as first drafts and summaries. People who learn to use it well save time.

Nederlandstalige versie: Wat is generatieve AI? Uitleg met Microsoft 365 Copilot


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