August 4th, 2025
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What’s new in Azure AI Foundry | July 2025

Nick Brady
Senior Program Manager, Developer Strategy

TL;DR

Deep Research Agent (Public Preview): Automate complex, multi-step web research with OpenAI’s o3-deep-research model, now available in Azure AI Foundry Agent Service. GPT-image-1 model: Adds input fidelity controls and partial image streaming for advanced image editing and generation. AgentOps, Red Teaming, and Tracing: Enhanced agent monitoring, evaluation, and compliance tools. Platform & Security: Pay-as-you-go compute, Prompt Shields GA, Entra Agent ID, and Purview integration for secure, scalable AI. SDK & Docs: Updates for Python, .NET, Java, and JavaScript SDKs; new guides for Deep Research and agent development.

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Models

GPT-image-1 model adds two new features (in preview):

  • Input fidelity parameter: The new input_fidelity parameter in the image edits API lets you control how closely the model preserves the style and features of the original image. This is useful for editing photos (e.g., facial features, avatars), maintaining brand identity, and realistic product imagery.
  • Partial image streaming: The image generation and edits APIs now support partial image streaming, providing users with early visual feedback as images are rendered.

Agents

Deep Research Agent (Public Preview)

Azure AI Foundry Agent Service now offers the Deep Research Agent in a limited public preview. Sign up for preview access to Deep Research enabling developers to automate complex, multi-step web research using OpenAI’s advanced agentic research model (o3-deep-research), tightly integrated with Bing Search for authoritative, up-to-date results. Read the full announcement.

Tools

AgentOps: Tracing, Evaluation, and Monitoring

AgentOps brings enhanced tracing, evaluation, and monitoring for agent performance, enabling robust validation and optimization in production environments.

AI Red Teaming Agent (Preview)

Run the AI Red Teaming Agent in the cloud, with a new UI for reviewing red teaming results directly in Azure AI Foundry projects.


Platform (API, SDK, UI, and more)

Python SDK Updates

AI Agents, Evals, Projects, and Search

  • AI Agents 1.0.2/1.1.0b4: Bug fixes for tracing, new Deep Research and MCP tool support, and a new tool_resources parameter for custom tool resource overrides. Changelog
  • AI Evaluation 1.9.0: Major improvements to evaluators (faster, less variance), new Azure OpenAI score model grader, and new risk categories for red teaming. Changelog
  • AI Projects 1.0.0b12: Breaking changes—removal/renaming of inference client methods, argument renames, and telemetry fixes. Changelog
  • Azure AI Search 11.5.3: Bug fix for search operation handling. Changelog

.NET SDK Updates

AI Agents, Evals, Projects, and Search

  • AI Agents Persistent: New features for Deep Research, MCP, and tracing. Breaking changes to method/property names and agent management APIs.
  • AI Foundry: AIProjectClient now requires a Project endpoint; connection classes consolidated and renamed; deprecated UploadFileRequest in favor of UploadFile under Datasets; OpenAI chat client now supports authenticated use in projects.
  • Azure AI Search: Bug fixes and minor enhancements.

Java SDK Updates

AI Agents, Evals, Projects, and Search

  • AI Agents Persistent (beta): Client merges, new InferenceClient, and breaking changes to client structure for improved usability.
  • AI Projects (beta): Major refactor—clients merged, new authentication patterns, and improved sample coverage.

JavaScript/TypeScript SDK Updates

AI Agents, Evals, Projects, and Search

  • AI Agents/Projects: Bug fixes, breaking changes to constructor parameter types and method signatures, and new features for agent orchestration and evaluation.

Fine-tuning & Evaluation Updates

  • RFT Observability (Public Preview): Gain real-time visibility into Reinforcement Fine-tuning (RFT) jobs with automatic evaluations at each checkpoint. Monitor progress, debug issues early, and optimize training without guesswork.
  • Quick Evals (Public Preview): Rapidly assess model outputs from Stored Completions with a single click, without launching a full evaluation job.
  • Python Grader (Public Preview): Build custom evaluation logic using Python, enabling more flexible and domain-specific evaluations.
  • Development Tier (Generally Available): Experiment with fine-tuning and model customization at zero hosting cost for 24-hours, now generally available for all developers. Ideal for prototyping and testing before scaling.

Platform & Service API Enhancements

Model Context Protocol (MCP) connections are in public preview. Model Router and Model Leaderboard features are now available via SDKs and APIs. All SDKs now support reinforcement fine-tuning for select advanced models. The new Developer Tier eliminates hosting costs for experimentation.

Documentation Updates

  • Guide: Use Terraform to create/configure Azure AI Foundry resources (link)
  • Limitation: Agent subnet must be dedicated per Foundry resource (link)
  • Deep Research: New detailed guide and code samples (link)
  • Known Issue: GPT-4.1 models fail with tool/function calls >300K tokens (link)
  • Deprecation: Connection strings deprecated for Agent Service (link)
  • Role: “Azure AI Administrator” role is now GA (link)
  • Quota: Increased agent file upload limit to 300GB, new per-agent/tool limits (link)
  • Region: Updated Llama, Phi, Mistral model region availability (link)
  • CLI: Azure CLI is for control plane ops only (link)
  • Portal: New instructions for deleting projects and hubs (link)
  • New: Introduction of capability hosts (link)
  • Python: Extensive MCP agent service code samples (link)
  • Model: Major updates to model docs, new models, and region support (link)
  • Security: New PII filter documentation (link)
  • Cost: Guide to managing fine-tuning costs (link)
  • Guide: Updated guide to getting started with fine-tuning (link)

Happy building—and let us know what you ship with #AzureAIFoundry!

Author

Nick Brady
Senior Program Manager, Developer Strategy

Since 2018, Nick Brady has been the unofficial spokesperson for Azure AI having delivered hundreds of engagements to customers and partners in his time at Microsoft. Nick leads developer strategy for Azure AI Foundry, focusing on content, code, and community to empower every developer to build, customize, and scale AI applications.

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