Integrating Microsoft Foundry with OpenClaw: Step by Step Model Configuration
Step 1: Deploying Models on Microsoft Foundry Let us kick things off in the Azure portal. To get our OpenClaw agent thinking like a genius, we need to deploy our models in Microsoft Foundry. For this guide, we are going to focus on deploying gpt-5.2-codex on Microsoft Foundry with OpenClaw. Navigate to your AI Hub, head over to the model catalog, choose the model you wish to use with OpenClaw and hit deploy. Once your deployment is successful, head to the endpoints section. Important: Grab your Endpoint URL and your API Keys right now and save them in a secure note. We will need these exact values to connect OpenClaw in a few minutes. Step 2: Installing and Initializing OpenClaw Next up, we need to get OpenClaw running on your machine. Open up your terminal and run the official installation script: curl -fsSL https://openclaw.ai/install.sh | bash The wizard will walk you through a few prompts. Here is exactly how to answer them to link up with our Azure setup: First Page (Model Selection): Choose "Skip for now". Second Page (Provider): Select azure-openai-responses. Model Selection: Select gpt-5.2-codex , For now only the models listed (hosted on Microsoft Foundry) in the picture below are available to be used with OpenClaw. Follow the rest of the standard prompts to finish the initial setup. Step 3: Editing the OpenClaw Configuration File Now for the fun part. We need to manually configure OpenClaw to talk to Microsoft Foundry. Open your configuration file located at ~/.openclaw/openclaw.json in your favorite text editor. Replace the contents of the models and agents sections with the following code block: { "models": { "providers": { "azure-openai-responses": { "baseUrl": "https://<YOUR_RESOURCE_NAME>.openai.azure.com/openai/v1", "apiKey": "<YOUR_AZURE_OPENAI_API_KEY>", "api": "openai-responses", "authHeader": false, "headers": { "api-key": "<YOUR_AZURE_OPENAI_API_KEY>" }, "models": [ { "id": "gpt-5.2-codex", "name": "GPT-5.2-Codex (Azure)", "reasoning": true, "input": ["text", "image"], "cost": { "input": 0, "output": 0, "cacheRead": 0, "cacheWrite": 0 }, "contextWindow": 400000, "maxTokens": 16384, "compat": { "supportsStore": false } }, { "id": "gpt-5.2", "name": "GPT-5.2 (Azure)", "reasoning": false, "input": ["text", "image"], "cost": { "input": 0, "output": 0, "cacheRead": 0, "cacheWrite": 0 }, "contextWindow": 272000, "maxTokens": 16384, "compat": { "supportsStore": false } } ] } } }, "agents": { "defaults": { "model": { "primary": "azure-openai-responses/gpt-5.2-codex" }, "models": { "azure-openai-responses/gpt-5.2-codex": {} }, "workspace": "/home/<USERNAME>/.openclaw/workspace", "compaction": { "mode": "safeguard" }, "maxConcurrent": 4, "subagents": { "maxConcurrent": 8 } } } } You will notice a few placeholders in that JSON. Here is exactly what you need to swap out: Placeholder Variable What It Is Where to Find It <YOUR_RESOURCE_NAME> The unique name of your Azure OpenAI resource. Found in your Azure Portal under the Azure OpenAI resource overview. <YOUR_AZURE_OPENAI_API_KEY> The secret key required to authenticate your requests. Found in Microsoft Foundry under your project endpoints or Azure Portal keys section. <USERNAME> Your local computer's user profile name. Open your terminal and type whoami to find this. Step 4: Restart the Gateway After saving the configuration file, you must restart the OpenClaw gateway for the new Foundry settings to take effect. Run this simple command: openclaw gateway restart Configuration Notes & Deep Dive If you are curious about why we configured the JSON that way, here is a quick breakdown of the technical details. Authentication Differences Azure OpenAI uses the api-key HTTP header for authentication. This is entirely different from the standard OpenAI Authorization: Bearer header. Our configuration file addresses this in two ways: Setting "authHeader": false completely disables the default Bearer header. Adding "headers": { "api-key": "<key>" } forces OpenClaw to send the API key via Azure's native header format. Important Note: Your API key must appear in both the apiKey field AND the headers.api-key field within the JSON for this to work correctly. The Base URL Azure OpenAI's v1-compatible endpoint follows this specific format: https://<your_resource_name>.openai.azure.com/openai/v1 The beautiful thing about this v1 endpoint is that it is largely compatible with the standard OpenAI API and does not require you to manually pass an api-version query parameter. Model Compatibility Settings "compat": { "supportsStore": false } disables the store parameter since Azure OpenAI does not currently support it. "reasoning": true enables the thinking mode for GPT-5.2-Codex. This supports low, medium, high, and xhigh levels. "reasoning": false is set for GPT-5.2 because it is a standard, non-reasoning model. Model Specifications & Cost Tracking If you want OpenClaw to accurately track your token usage costs, you can update the cost fields from 0 to the current Azure pricing. Here are the specs and costs for the models we just deployed: Model Specifications Model Context Window Max Output Tokens Image Input Reasoning gpt-5.2-codex 400,000 tokens 16,384 tokens Yes Yes gpt-5.2 272,000 tokens 16,384 tokens Yes No Current Cost (Adjust in JSON) Model Input (per 1M tokens) Output (per 1M tokens) Cached Input (per 1M tokens) gpt-5.2-codex $1.75 $14.00 $0.175 gpt-5.2 $2.00 $8.00 $0.50 Conclusion: And there you have it! You have successfully bridged the gap between the enterprise-grade infrastructure of Microsoft Foundry and the local autonomy of OpenClaw. By following these steps, you are not just running a chatbot; you are running a sophisticated agent capable of reasoning, coding, and executing tasks with the full power of GPT-5.2-codex behind it. The combination of Azure's reliability and OpenClaw's flexibility opens up a world of possibilities. Whether you are building an automated devops assistant, a research agent, or just exploring the bleeding edge of AI, you now have a robust foundation to build upon. Now it is time to let your agent loose on some real tasks. Go forth, experiment with different system prompts, and see what you can build. If you run into any interesting edge cases or come up with a unique configuration, let me know in the comments below. Happy coding!A Recap of the Build AI Agents with Custom Tools Live Session
Artificial Intelligence is evolving, and so are the ways we build intelligent agents. On a recent Microsoft YouTube Live session, developers and AI enthusiasts gathered to explore the power of custom tools in AI agents using Azure AI Studio. The session walked through concepts, use cases, and a live demo that showed how integrating custom tools can bring a new level of intelligence and adaptability to your applications. 🎥 Watch the full session here: https://www.youtube.com/live/MRpExvcdxGs?si=X03wsQxQkkshEkOT What Are AI Agents with Custom Tools? AI agents are essentially smart workflows that can reason, plan, and act — powered by large language models (LLMs). While built-in tools like search, calculator, or web APIs are helpful, custom tools allow developers to tailor agents for business-specific needs. For example: Calling internal APIs Accessing private databases Triggering backend operations like ticket creation or document generation Learn Module Overview: Build Agents with Custom Tools To complement the session, Microsoft offers a self-paced Microsoft Learn module that gives step-by-step guidance: Explore the module Key Learning Objectives: Understand why and when to use custom tools in agents Learn how to define, integrate, and test tools using Azure AI Studio Build an end-to-end agent scenario using custom capabilities Hands-On Exercise: The module includes a guided lab where you: Define a tool schema Register the tool within Azure AI Studio Build an AI agent that uses your custom logic Test and validate the agent’s response Highlights from the Live Session Here are some gems from the session: Real-World Use Cases – Automating customer support, connecting to CRMs, and more Tool Manifest Creation – Learn how to describe a tool in a machine-understandable way Live Azure Demo – See exactly how to register tools and invoke them from an AI agent Tips & Troubleshooting – Best practices and common pitfalls when designing agents Want to Get Started? If you're a developer, AI enthusiast, or product builder looking to elevate your agent’s capabilities — custom tools are the next step. Start building your own AI agents by combining the power of: Microsoft Learn Module YouTube Live Session Final Thoughts The future of AI isn't just about smart responses — it's about intelligent actions. Custom tools enable your AI agent to do things, not just say things. With Azure AI Studio, building a practical, action-oriented AI assistant is more accessible than ever. Learn More and Join the Community Learn more about AI Agents with https://aka.ms/ai-agents-beginnersOpen Source Course and Building Agents. Join the Azure AI Foundry Discord Channel. Continue the discussion and learning: https://aka.ms/AI/discord Have questions or want to share what you're building? Let’s connect on LinkedIn or drop a comment under the YouTube video!Smart Auditing: Leveraging Azure AI Agents to Transform Financial Oversight
In today's data-driven business environment, audit teams often spend weeks poring over logs and databases to verify spending and billing information. This time-consuming process is ripe for automation. But is there a way to implement AI solutions without getting lost in complex technical frameworks? While tools like LangChain, Semantic Kernel, and AutoGen offer powerful AI agent capabilities, sometimes you need a straightforward solution that just works. So, what's the answer for teams seeking simplicity without sacrificing effectiveness? This tutorial will show you how to use Azure AI Agent Service to build an AI agent that can directly access your Postgres database to streamline audit workflows. No complex chains or graphs required, just a practical solution to get your audit process automated quickly. The Auditing Challenge: It's the month end, and your audit team is drowning in spreadsheets. As auditors reviewing financial data across multiple SaaS tenants, you're tasked with verifying billing accuracy by tracking usage metrics like API calls, storage consumption, and user sessions in Postgres databases. Each tenant generates thousands of transactions daily, and traditionally, this verification process consumes weeks of your team's valuable time. Typically, teams spend weeks: Manually extracting data from multiple database tables. Cross-referencing usage with invoices. Investigating anomalies through tedious log analysis. Compiling findings into comprehensive reports. With an AI-powered audit agent, you can automate these tasks and transform the process. Your AI assistant can: Pull relevant usage data directly from your database Identify billing anomalies like unexpected usage spikes Generate natural language explanations of findings Create audit reports that highlight key concerns For example, when reviewing a tenant's invoice, your audit agent can query the database for relevant usage patterns, summarize anomalies, and offer explanations: "Tenant_456 experienced a 145% increase in API usage on April 30th, which explains the billing increase. This spike falls outside normal usage patterns and warrants further investigation." Let’s build an AI agent that connects to your Postgres database and transforms your audit process from manual effort to automated intelligence. Prerequisites: Before we start building our audit agent, you'll need: An Azure subscription (Create one for free). The Azure AI Developer RBAC role assigned to your account. Python 3.11.x installed on your development machine. OR You can also use GitHub Codespaces, which will automatically install all dependencies for you. You’ll need to create a GitHub account first if you don’t already have one. Setting Up Your Database: For this tutorial, we'll use Neon Serverless Postgres as our database. It's a fully managed, cloud-native Postgres solution that's free to start, scales automatically, and works excellently for AI agents that need to query data on demand. Creating a Neon Database on Azure: Open the Neon Resource page on the Azure portal Fill out the form with the required fields and deploy your database After creation, navigate to the Neon Serverless Postgres Organization service Click on the Portal URL to access the Neon Console Click "New Project" Choose an Azure region Name your project (e.g., "Audit Agent Database") Click "Create Project" Once your project is successfully created, copy the Neon connection string from the Connection Details widget on the Neon Dashboard. It will look like this: postgresql://[user]:[password]@[neon_hostname]/[dbname]?sslmode=require Note: Keep this connection string saved; we'll need it shortly. Creating an AI Foundry Project on Azure: Next, we'll set up the AI infrastructure to power our audit agent: Create a new hub and project in the Azure AI Foundry portal by following the guide. Deploy a model like GPT-4o to use with your agent. Make note of your Project connection string and Model Deployment name. You can find your connection string in the overview section of your project in the Azure AI Foundry portal, under Project details > Project connection string. Once you have all three values on hand: Neon connection string, Project connection string, and Model Deployment Name, you are ready to set up the Python project to create an Agent. All the code and sample data are available in this GitHub repository. You can clone or download the project. Project Environment Setup: Create a .env file with your credentials: PROJECT_CONNECTION_STRING="<Your AI Foundry connection string> "AZURE_OPENAI_DEPLOYMENT_NAME="gpt4o" NEON_DB_CONNECTION_STRING="<Your Neon connection string>" Create and activate a virtual environment: python -m venv .venv source .venv/bin/activate # on macOS/Linux .venv\Scripts\activate # on Windows Install required Python libraries: pip install -r requirements.txt Example requirements.txt: Pandas python-dotenv sqlalchemy psycopg2-binary azure-ai-projects ==1.0.0b7 azure-identity Load Sample Billing Usage Data: We will use a mock dataset for tenant usage, including computed percent change in API calls and storage usage in GB: tenant_id date api_calls storage_gb tenant_456 2025-04-01 1000 25.0 tenant_456 2025-03-31 950 24.8 tenant_456 2025-03-30 2200 26.0 Run python load_usage_data.py Python script to create and populate the usage_data table in your Neon Serverless Postgres instance: # load_usage_data.py file import os from dotenv import load_dotenv from sqlalchemy import ( create_engine, MetaData, Table, Column, String, Date, Integer, Numeric, ) # Load environment variables from .env load_dotenv() # Load connection string from environment variable NEON_DB_URL = os.getenv("NEON_DB_CONNECTION_STRING") engine = create_engine(NEON_DB_URL) # Define metadata and table schema metadata = MetaData() usage_data = Table( "usage_data", metadata, Column("tenant_id", String, primary_key=True), Column("date", Date, primary_key=True), Column("api_calls", Integer), Column("storage_gb", Numeric), ) # Create table with engine.begin() as conn: metadata.create_all(conn) # Insert mock data conn.execute( usage_data.insert(), [ { "tenant_id": "tenant_456", "date": "2025-03-27", "api_calls": 870, "storage_gb": 23.9, }, { "tenant_id": "tenant_456", "date": "2025-03-28", "api_calls": 880, "storage_gb": 24.0, }, { "tenant_id": "tenant_456", "date": "2025-03-29", "api_calls": 900, "storage_gb": 24.5, }, { "tenant_id": "tenant_456", "date": "2025-03-30", "api_calls": 2200, "storage_gb": 26.0, }, { "tenant_id": "tenant_456", "date": "2025-03-31", "api_calls": 950, "storage_gb": 24.8, }, { "tenant_id": "tenant_456", "date": "2025-04-01", "api_calls": 1000, "storage_gb": 25.0, }, ], ) print("✅ usage_data table created and mock data inserted.") Create a Postgres Tool for the Agent: Next, we configure an AI agent tool to retrieve data from Postgres. The Python script billing_agent_tools.py contains: The function billing_anomaly_summary() that: Pulls usage data from Neon. Computes % change in api_calls. Flags anomalies with a threshold of > 1.5x change. Exports user_functions list for the Azure AI Agent to use. You do not need to run it separately. # billing_agent_tools.py file import os import json import pandas as pd from sqlalchemy import create_engine from dotenv import load_dotenv # Load environment variables load_dotenv() # Set up the database engine NEON_DB_URL = os.getenv("NEON_DB_CONNECTION_STRING") db_engine = create_engine(NEON_DB_URL) # Define the billing anomaly detection function def billing_anomaly_summary( tenant_id: str, start_date: str = "2025-03-27", end_date: str = "2025-04-01", limit: int = 10, ) -> str: """ Fetches recent usage data for a SaaS tenant and detects potential billing anomalies. :param tenant_id: The tenant ID to analyze. :type tenant_id: str :param start_date: Start date for the usage window. :type start_date: str :param end_date: End date for the usage window. :type end_date: str :param limit: Maximum number of records to return. :type limit: int :return: A JSON string with usage records and anomaly flags. :rtype: str """ query = """ SELECT date, api_calls, storage_gb FROM usage_data WHERE tenant_id = %s AND date BETWEEN %s AND %s ORDER BY date DESC LIMIT %s; """ df = pd.read_sql(query, db_engine, params=(tenant_id, start_date, end_date, limit)) if df.empty: return json.dumps( {"message": "No usage data found for this tenant in the specified range."} ) df.sort_values("date", inplace=True) df["pct_change_api"] = df["api_calls"].pct_change() df["anomaly"] = df["pct_change_api"].abs() > 1.5 return df.to_json(orient="records") # Register this in a list to be used by FunctionTool user_functions = [billing_anomaly_summary] Create and Configure the AI Agent: Now we'll set up the AI agent and integrate it with our Neon Postgres tool using the Azure AI Agent Service SDK. The Python script does the following: Creates the agent Instantiates an AI agent using the selected model (gpt-4o, for example), adds tool access, and sets instructions that tell the agent how to behave (e.g., “You are a helpful SaaS assistant…”). Creates a conversation thread A thread is started to hold a conversation between the user and the agent. Posts a user message Sends a question like “Why did my billing spike for tenant_456 this week?” to the agent. Processes the request The agent reads the message, determines that it should use the custom tool to retrieve usage data, and processes the query. Displays the response Prints the response from the agent with a natural language explanation based on the tool’s output. # billing_anomaly_agent.py import os from datetime import datetime from azure.ai.projects import AIProjectClient from azure.identity import DefaultAzureCredential from azure.ai.projects.models import FunctionTool, ToolSet from dotenv import load_dotenv from pprint import pprint from billing_agent_tools import user_functions # Custom tool function module # Load environment variables from .env file load_dotenv() # Create an Azure AI Project Client project_client = AIProjectClient.from_connection_string( credential=DefaultAzureCredential(), conn_str=os.environ["PROJECT_CONNECTION_STRING"], ) # Initialize toolset with our user-defined functions functions = FunctionTool(user_functions) toolset = ToolSet() toolset.add(functions) # Create the agent agent = project_client.agents.create_agent( model=os.environ["AZURE_OPENAI_DEPLOYMENT_NAME"], name=f"billing-anomaly-agent-{datetime.now().strftime('%Y%m%d%H%M')}", description="Billing Anomaly Detection Agent", instructions=f""" You are a helpful SaaS financial assistant that retrieves and explains billing anomalies using usage data. The current date is {datetime.now().strftime("%Y-%m-%d")}. """, toolset=toolset, ) print(f"Created agent, ID: {agent.id}") # Create a communication thread thread = project_client.agents.create_thread() print(f"Created thread, ID: {thread.id}") # Post a message to the agent thread message = project_client.agents.create_message( thread_id=thread.id, role="user", content="Why did my billing spike for tenant_456 this week?", ) print(f"Created message, ID: {message.id}") # Run the agent and process the query run = project_client.agents.create_and_process_run( thread_id=thread.id, agent_id=agent.id ) print(f"Run finished with status: {run.status}") if run.status == "failed": print(f"Run failed: {run.last_error}") # Fetch and display the messages messages = project_client.agents.list_messages(thread_id=thread.id) print("Messages:") pprint(messages["data"][0]["content"][0]["text"]["value"]) # Optional cleanup: # project_client.agents.delete_agent(agent.id) # print("Deleted agent") Run the agent: To run the agent, run the following command python billing_anomaly_agent.py Snippet of output from agent: Using the Azure AI Foundry Agent Playground: After running your agent using the Azure AI Agent SDK, it is saved within your Azure AI Foundry project. You can now experiment with it using the Agent Playground. To try it out: Go to the Agents section in your Azure AI Foundry workspace. Find your billing anomaly agent in the list and click to open it. Use the playground interface to test different financial or billing-related questions, such as: “Did tenant_456 exceed their API usage quota this month?” “Explain recent storage usage changes for tenant_456.” This is a great way to validate your agent's behavior without writing more code. Summary: You’ve now created a working AI agent that talks to your Postgres database, all using: A simple Python function Azure AI Agent Service A Neon Serverless Postgres backend This approach is beginner-friendly, lightweight, and practical for real-world use. Want to go further? You can: Add more tools to the agent Integrate with vector search  (e.g., detect anomaly reasons from logs using embeddings) Resources: Introduction to Azure AI Agent Service Develop an AI agent with Azure AI Agent Service Getting Started with Azure AI Agent Service Neon on Azure Build AI Agents with Azure AI Agent Service and Neon Multi-Agent AI Solution with Neon, Langchain, AutoGen and Azure OpenAI Azure AI Foundry GitHub Discussions That's it, folks! But the best part? You can become part of a thriving community of learners and builders by joining the Microsoft Learn Student Ambassadors Community. Connect with like-minded individuals, explore hands-on projects, and stay updated with the latest in cloud and AI. 💬 Join the community on Discord here and explore more benefits on the Microsoft Learn Student Hub.AI Agents: Metacognition for Self-Aware Intelligence - Part 9
This blog post, Part 9 in a series on AI agents, introduces the concept of metacognition, or "thinking about thinking," and its application to AI agents. It explains how metacognition enables agents to self-evaluate, adapt, and improve their performance. The post outlines the key components of an AI agent and illustrates metacognition with a travel agent example, demonstrating how it can enhance planning, error correction, and personalization. The post also discusses the Corrective RAG approach and demonstrates code snippets.
