The August 2026 update for the AI Gateway tier (preview) of Azure API Management introduces new capabilities for observing AI workloads and governing model spend.

Release highlights

• Richer OpenTelemetry observability: AI Gateway can now emit logs, distributed traces, token metrics, and estimated cost metrics through the OpenTelemetry Protocol. The built-in monitoring experience helps teams investigate model and MCP tool activity, policy execution, latency, errors, token consumption, and individual traces.
• Model cost monitoring and budget enforcement: Teams can review estimated model spend by API key and model, then use cost limit policies to set calendar-based budgets and block requests when configured limits are reached.

The release also streamlines Microsoft Foundry model imports, refines provider onboarding, improves portal reliability and error guidance, expands Anthropic Messages compatibility, and adds an in-product What's new experience.

For configuration guidance, important upgrade information, and the complete list of changes, read the full August 2026 release notes in the AI Gateway portal.

Try the latest capabilities in the AI Gateway portal.