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Microsoft Foundry Agent Service offers a managed runtime for containerized AI agents on Azure, handling deployment, scaling, and session persistence. It supports multiple agent frameworks and protocols, with per-session sandboxing and immutable versioning. Users retain responsibility for agent behavior and compliance.
Microsoft has introduced a serverless agents runtime for Azure Functions, currently in preview, that defines agents in Markdown files and runs them as ordinary Function Apps. The runtime discovers agent definitions from project files, integrates with MCP servers and custom tools, and inherits standard Functions features like scale-to-zero and managed identity. It targets event-driven agents that are started by timers, queues, or HTTP requests without needing a dedicated agent server.
This post walks through deploying an AG-UI agent on Microsoft Foundry's new MicroVM-based hosted agents. It covers the required container setup, deployment manifests, and a Next.js chat client, and explains why the Invocations protocol is preferred over Responses for AG-UI. Key limitations such as lack of durable conversation history and limited trace telemetry are also noted.
Microsoft's open-source Azure Architecture Diagram Builder processed 5,023 generation and refinement events in three months, prompting a four-stage workflow and feedback-driven changes. The tool now preserves manual layout during refinements, marks stale validation results, and includes deterministic integrity checks. An evidence-aware physical architecture view is planned but not yet shipped.
Microsoft has updated Azure Content Understanding with a generally available CU 1.0 API refresh and a CU 2.0 preview. The GA version adds GPT-5 model options and efficiency gains, while the preview introduces lower-latency synchronous APIs, advanced contextualization, and an agentic reasoning mode for complex documents. All performance figures are based on internal evaluations and may vary with production workloads.
Microsoft has added synchronous processing options to Azure Content Understanding for its Read, Layout, and Digital Parse analyzers, allowing immediate extraction without temporary storage. The feature is in public preview, with higher pricing per page and limits of 10 MB, five pages, or 30,000 characters per request. It addresses low-latency needs for agentic workflows and confidential document handling.
The Azure Developer CLI extension framework is now generally available, providing a stable base for custom commands and lifecycle hooks. The release adds project-level extension requirements, package-registry distribution, and custom service targets. Extensions like Microsoft Foundry demonstrate the model, though individual extensions may still be in preview.
Microsoft and NVIDIA have integrated Azure Blob Storage with NVIDIA Dynamo to speed up AI inference by improving model weight loading and KV cache management. The integrations report up to 7.3x faster weight loading and 2.8x lower time-to-first-token in the companies' own benchmarks, with deployment recipes available for verification.
Microsoft has made private skill catalogs for Foundry available in public preview, allowing organizations to register agent skills via Azure API Center and enforce governance through allowed tools lists. The feature separates admin and developer roles, with RBAC propagation and Git sync considerations affecting visibility. As a preview offering, it lacks an SLA and is not recommended for production workloads.
Microsoft's Foundry Agent Optimizer uses reflection-based optimization to read failure traces and propose edits to agent configuration, including instructions and tool descriptions. It maintains a Pareto frontier of candidates for human review and showed consistent improvements across six prompt agents, though it is in preview and results vary.
