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If you're not aware, all files shared in a Teams chat are uploaded to the OneDrive for Business of the person who uploaded the file. Lots of permissions options for your file sharing. Another reason to use a Team! A Team's file permissions are fluid with the Team itself! If you add or remove people from the chat, the file permissions remains the same. Select from the below options. If you choose People currently in this chat, just know that this is a snapshot-in-time permission setup. Now, notably, you can choose the permissions. To share a file, open Chat from the Teams app bar, find the appropriate message, and click the paper clip icon. I've seen too many people use private chat as a crutch and you shouldn't because if you share files there, the person who shares the files might leave. The file can't just be hosted in some "ether" somewhere.

The main reason for that is because when someone shares a file, it's uploaded to a special folder in their OneDrive for Business called Microsoft Teams Chat Files. Teams is meant to be a collaboration tool among teammate group chat is not the way to do that, especially when it comes to sharing files. Sharing files in private chat in Teams is great.