Deployment Guide-Copilot Studio agent with MCP Server exposed by API Management using OAuth 2.0
Introduction In today’s enterprise landscape, enabling AI agents to interact with backend systems securely and at scale is critical. By exposing MCP servers through Azure API Management (APIM), organizations can provide controlled access to these services. When combined with OAuth 2.0 authorization code flow, this setup ensures robust, enterprise-grade security for AI agents built in Copilot Studio—empowering intelligent automation while maintaining strict access governance. Disclaimer & Caveats This article explores how to configure a MCP tool—exposed as a MCP server via APIM—for secure consumption by AI agents built in Copilot Studio. Leveraging the OAuth 2.0 Authorization Code Flow, this setup ensures enterprise-grade security by enabling delegated access without exposing user credentials. With Azure API Management now supporting MCP server capabilities in public preview, developers can expose REST APIs as MCP tools using a standardized JSON-RPC interface. This allows AI agents to invoke backend services securely and scalable, without the need to rebuild existing APIs. Copilot Studio, also in preview for MCP integration, empowers organizations to orchestrate intelligent agents that interact with these tools in real time. While this guide provides a foundational approach, every environment is unique. You can enhance security further by implementing app roles, conditional access policies, and extending your integration logic with custom Python code for advanced scenarios. ⚠️ Note: Both MCP server support in APIM and MCP tool integration in Copilot Studio are currently in public preview. As these platforms evolve rapidly, expect changes and improvements over time. Always refer to the https://learn.microsoft.com/en-us/azure/api-management/export-rest-mcp-server for the latest updates. This article is about consuming remote MCP servers. In Azure, managed identity can also be leveraged for APIM integration. What is Authorization Code Flow? The Authorization Code Flow is designed for applications that can securely store a client secret (like server-side apps). It allows the app to obtain an access token on behalf of the user without exposing their credentials. This flow uses an intermediate authorization code to exchange for tokens, adding an extra layer of security. Steps in the Flow User Authentication The user is redirected to the Authorization Server (In this case: Azure AD) to log in and grant consent. Authorization Code Issued After successful login, the Authorization Server sends an authorization code to the app via the redirect URI. Token Exchange The app sends the authorization code (plus client credentials) to the Token Endpoint to get: Access Token (for API calls) and Refresh Token (to renew access without user interaction) API Access The app uses the Access Token to call protected resources. Below diagram shows the Authorization code flow in detail. Press enter or click to view image in full size Microsoft identity platform and OAuth 2.0 authorization code flow — Microsoft identity platform | Microsoft Learn High Level Architecture Press enter or click to view image in full size This architecture can also be implemented with APIM backend app registration only. However, stay cautious in configuring redirect URIs appropriately. Remote MCP Servers using APIM Architecture APIM exposing Remote MCP servers, enabling AI agents—such as those built in Copilot Studio—to securely access backend services using standardized JSON-RPC interfaces. This integration offers a robust, scalable, and secure way to connect AI tools with enterprise APIs. Key Capabilities: Secure Gateway: APIM acts as an intelligent gateway, handling OAuth 2.0 Authorization Code Flow, authentication, and request routing. Monitoring & Observability: Integration with Azure Log Analytics and Application Insights enables deep visibility into API usage, performance, and errors. Policy Enforcement: APIM’s policy engine allows for custom rules, including token validation, header manipulation, and response transformation. Rate Limiting & Throttling: Built-in support for rate limits, quotas, and IP filtering helps protect backend services from abuse and ensures fair usage. Managed Identity & Entra ID: Secure service-to-service communication is enabled via system-assigned and user-assigned managed identities, with Entra ID handling identity and access management. Flexible Deployment: MCP servers can be hosted in Azure Functions, App Services, or Container Apps, and exposed via APIM with minimal changes to existing APIs. To learn more, visit https://learn.microsoft.com/en-us/samples/azure-samples/remote-mcp-apim-functions-python/remote-mcp-apim-functions-python/ Develop MCP server in VS Code This deployment guide provides sample MCP code written in python for ease of use. It is available on the following GitHub repo. However, you can also use your own MCP server. Clone the following repository and open in VS Code. git clone https://github.com/mafzal786/mcp-server.git Run the following to execute it locally. cd mcp-server uv venv uv sync uv run mcpserver.py Deploy MCP Server as Azure Container App In this deployment guide, MCP server is deployed in Azure Container App. It can also be deployed as Azure App service. Deploy the MCP server in Azure container App by running the following command. It can be deployed by many other various ways such as via VS Code or CI/CD pipeline. AZ Cli is used for simplicity. az containerapp up \ --resource-group <RESOURCE_GROUP_NAME> \ --name streamable-mcp-server2 \ --environment mcp \ --location <REGION> \ --source . Configure Authentication for Azure Container App 1. Sign in Azure portal. Visit the container App in Azure and Click “Authentication” as shown below. Press enter or click to view image in full size For more details, visit the following link: Enable authentication and authorization in Azure Container Apps with Microsoft Entra ID | Microsoft Learn Click Add Identity Provider as shown. 2. Select Microsoft from the drop down and leave everything as is as shown below. 3. This will create a new app registration for the container App. After it is all setup, it will look like as below. As soon as authentication is configured. it will make container app inaccessible except for OAuth. Note: If you have app registration for Azure Container App already configured, use that by selecting "pick an existing app registration in this directory" option. Review App Registration of Container App — Backend Visit App registration and click streamable-mcp-server2 as in this case. Click on Authentication tab. Verify the Redirect URIs. you should see a redirect URL for container app. URI will end with /.auth/login/aad/callback as shown in the green box in the below screenshot. Now click on “Expose an API”. Confirm Application ID URI is configured with scope as shown below. its format is api://<client id> Scope "user_impersonation" is created. Verify API Permission. Make sure you Grant admin consent for your tenant as shown below. More scope can be created depending on the requirement of data access. Note: Make sure to "Grant admin consent" before proceeding to next step. Create App registration for representing APIM API Lauch Azure Portal. Visit App registration. Click New registration. Create a new App registration as shown below. For example, "apim-mcp-backend-api" in this case. Click "Expose an API", configure Application ID URI, and add a scope as shown in the below diagram such as user_impersonation. Click "App roles" and create the following role as shown below. More roles can be created depending on the requirements and case by case basis. Here app roles are created to get the concept around it and how it will be used in APIM inbound policies in the coming sections. Create App Registration for Client App — Copilot Studio In these steps, we will be configuring app registration for the client app, such as copilot studio in this case acting as a client app. This is also mentioned in the “high level architecture” diagram in the earlier section of this article. Lauch Azure Portal. Visit App registration. Click New registration. Create a new App registration. leave the Redirect URL as of now, we will configure it later as it is provided by copilot studio when configuring custom MCP connector. 3. Click on API permission and click “Add a permission”. Click Microsoft Graph and then click “Delegated permissions”. Select email, openid, profile as shown below. 4. Make sure to Grant admin consent and it should look like as below. 5. Create a secret. click “Certificates & secrets”. Create a new client secret by clicking “New client secret”. store the value as it will be masked after some time. if that happens, you can always delete and re-create a new secret. 6. Capture the following as you would need it in configuring MCP tool in Copilot Studio. Client ID from the Overview Tab of app registration. Client secret from “Certificates & secrets” tab. 7. Configure API permissions for APIM API i.e. "apim-mcp-backend-api" in this case. Click “API permissions” tab. Click “Add a permission”. Click on “My APIs” tab as shown below and select "apim-mcp-backend-api". Note: If you don't see the app registration in "My APIs". Go to App registration. Click "Owners". Add your AD account as Owners. 8. Select "Delegated permissions". Then select the permission as shown below. 9. Select the Application permission. Select the App roles created in the apim-mcp-backend-api registration. Such as mcp.read in this case. You MUST “Grant admin consent” as final step. It is very important!!! I can’t emphasize more on that. without it, nothing will work!!! 10. End result of this client app registration should look like as mentioned in the below figure. Configure permissions for Container App registration Lauch Azure Portal. Visit app registration. Select app registration of Azure container app such as streamable-mcp-server2 in this case. Select API permissions. Add the following delegated and application permissions as shown in the below diagram. Note: Don't forget to Grant admin consent. Configure allowed token audience for Container App It defines which audience values (aud claim) in a token are considered valid for your app. When a client app requests an access token from Microsoft Entra ID (Azure AD), the token includes an aud claim that identifies the intended recipient. Your container app will only accept tokens where the aud claim matches one of the values in the Allowed Token Audiences list. This is important as it ensures that only tokens issued for your API or app are accepted and prevents misuse of tokens intended for other resources. This adds extra layer of security. In the Azure Portal, visit Azure Container App. i.e. streamable-mcp-server2. Click on "Authentication" Click "Edit" under identity provider Under "Allowed token audiences", add the application ID URI of "apim-mcp-backend-api". As this will be included as an audience in the access token. Best Practices Only include trusted client app IDs. Avoid using overly broad values like “allow all” (not recommended). Validate tokens using Microsoft libraries (MSAL) or built-in auth features. Configure MCP server in API Management Note: Provisioning an API Management resource is outside the scope of this document. If you do not already have an API Management instance, follow this QuickStart: https://learn.microsoft.com/en-us/azure/api-management/get-started-create-service-instance The following service tiers are available for preview: Classic Basic, Standard, Premium, and Basic v2, Standard v2, Premium v2. For the Classic Basic, Standard, or Premium tiers, you must join the AI Gateway Early Update group to enable MCP server features. Please allow up to 2 hours for the update to take effect. Expose an existing MCP server Follow these steps to expose an existing MCP server is API Management: In the Azure portal, navigate to your API Management instance. In the left-hand menu, under APIs, select MCP servers > + Create MCP server. Select Expose an existing MCP server. In Backend MCP server: Enter the existing MCP server base URL. Example: https://streamable-mcp-serverv2.kdhg489457dslkjgn,.eastus2.azurecontainerapps.io/mcpfor the Microsoft Azure Container App hosting MCP server. In Transport type, Streamable HTTP is selected by default. In New MCP server: Enter a Name the MCP server in API Management. In Base path, enter a route prefix for tools. Example: mcptools Optionally, enter a Description for the MCP server. Select Create. Below diagram shows the MCP servers configured in APIM for reference. Configure policies for MCP server Configure one or more API Management policies to help manage the MCP server. The policies are applied to all API operations exposed as tools in the MCP server and can be used to control access, authentication, and other aspects of the tools. To configure policies for the MCP server: In the Azure portal, navigate to your API Management instance. In the left-hand menu, under APIs, select MCP Servers. Select an MCP server from the list. In the left menu, under MCP, select Policies. In the policy editor, add or edit the policies you want to apply to the MCP server's tools. The policies are defined in XML format. <!-- - Policies are applied in the order they appear. - Position <base/> inside a section to inherit policies from the outer scope. - Comments within policies are not preserved. --> <!-- Add policies as children to the <inbound>, <outbound>, <backend>, and <on-error> elements --> <policies> <!-- Throttle, authorize, validate, cache, or transform the requests --> <inbound> <base /> <set-variable name="accessToken" value="@(context.Request.Headers.GetValueOrDefault("Authorization", "").Replace("Bearer ", ""))" /> <!-- Log the captured access token to the trace logs --> <trace source="Access Token Debug" severity="information"> <message>@("Access Token: " + (string)context.Variables["accessToken"])</message> </trace> <set-variable name="userId" value="@(context.Request.Headers.GetValueOrDefault("Authorization", "Bearer ").Split(' ')[1].AsJwt().Claims["oid"].FirstOrDefault())" /> <set-variable name="userName" value="@(context.Request.Headers.GetValueOrDefault("Authorization", "Bearer ").Split(' ')[1].AsJwt().Claims["name"].FirstOrDefault())" /> <trace source="User Name Debug" severity="information"> <message>@("username: " + (string)context.Variables["userName"])</message> </trace> <set-variable name="scp" value="@(context.Request.Headers.GetValueOrDefault("Authorization", "Bearer ").Split(' ')[1].AsJwt().Claims["scp"].FirstOrDefault())" /> <trace source="Scope Debug" severity="information"> <message>@("scope: " + (string)context.Variables["scp"])</message> </trace> <set-variable name="roles" value="@(context.Request.Headers.GetValueOrDefault("Authorization", "Bearer ").Split(' ')[1].AsJwt().Claims["roles"].FirstOrDefault())" /> <trace source="Role Debug" severity="information"> <message>@("Roles: " + (string)context.Variables["roles"])</message> </trace> <!-- <set-variable name="requestBody" value="@{ return context.Request.Body.As<string>(preserveContent:true); }" /> <trace source="Request Body information" severity="information"> <message>@("Request body: " + (string)context.Variables["requestBody"])</message> </trace> --> <validate-azure-ad-token tenant-id="{{tenant-id}}" header-name="Authorization" failed-validation-httpcode="401" failed-validation-error-message="Unauthorized. Access token is missing or invalid."> <client-application-ids> <application-id>{{client-application-id}}</application-id> </client-application-ids> <audiences> <audience>{{audience}}</audience> </audiences> <required-claims> <claim name="roles" match="any"> <value>mcp.read</value> </claim> </required-claims> </validate-azure-ad-token> </inbound> <!-- Control if and how the requests are forwarded to services --> <backend> <base /> </backend> <!-- Customize the responses --> <outbound> <base /> </outbound> <!-- Handle exceptions and customize error responses --> <on-error> <base /> <trace source="Role Debug" severity="error"> <message>@("username: " + (string)context.Variables["userName"] + " has error in accessing the MCP server, could be auth or role related...")</message> </trace> <return-response> <set-status code="403" reason="Forbidden" /> <set-body> {"error":"Missing required scope or role"} </set-body> </return-response> </on-error> </policies> Note: Update the above inbound policy with the tenant Id, client application id, and audience as per your environment. It is recommended to use APIM "Named values" instead of hard coding inside the policy. To learn more, visit Use named values in Azure API Management policies Configure Diagnostics for APIM In this solution, APIM diagnostics are configured to forward log data to Log Analytics. Testing and validation will be carried out using insights from Log Analytics. Note: Setting up diagnostics is outside the scope of this article. However, you can visit the following link for more information. https://learn.microsoft.com/en-us/azure/api-management/api-management-howto-use-azure-monitor Below diagram shows what Logs are being sent to Log Analytics workspace. MCP Tool configuration in Copilot Studio Lauch copilot studio at https://copilotstudio.microsoft.com/. Configuration of environment and agent is beyond the scope of this article. It is assumed, you already have environment setup and agent has been created. Following link will help you, how to create an agent in copilot studio. Quickstart: Create and deploy an agent — Microsoft Copilot Studio | Microsoft Learn Inside agent configuration, click "Add tool". 3. Click on New tool. 4. Select Model Context Protocol. 5. Provide all relevant information for MCP server. Make sure your server URL ends with your mcp setup. In this case, it is APIM MCP server URL, with base path configured in APIM in the end. Provide server name and server description. Select OAuth 2.0 radio button. 6. Provide the following in the OAuth 2.0 section Client ID of client app registration. In this case, copilot-studio-client as configured earlier. Client secret of copilot-studio-client app registration. Authorization URL: https://login.microsoftonline.com/common/oauth2/v2.0/authorize Token URL template & Refresh URL: https://login.microsoftonline.com/oauth2/v2.0/token Scopes: openid, profile, email — which we selected earlier for Microsoft Azure Graph permissions. Click “Create”. This will provide you Redirect URL. you need to configure the redirect URL in client app registration. In this case, it is copilot-agent-client. Configure Redirect URI in Client App Registration Visit client app registration. i.e. copilot-studio-client. Click Authentication Tab and provide the Web Redirect URIs as shown below. Note: Configure Redirect URIs MUST be configured in app registration. Otherwise, authorization will not complete and sign on will fail. Configure redirect URI in APIM API app registration Also configure apim-mcp-backend-api app registration with the same redirect URI as shown below. Modify MCP connector in PowerApps Now visit the https://make.powerapps.com and open the newly created connector as shown below. Select the security tab and modify the Resource URL with application ID URI of apim-mcp-backend-api configured earlier in app registration for expose an API. Add .default in the scope. Provide the secret of client app registration as it will not let you update the connector. This is extra security measure for updating the connector in Powerapps. Click Update connector. CORS Configuration CORS configuration is a MUST!!! Since our Azure Container App is a remote MCP server with totally different domain or origin. Power Apps and CORS for External Domains — Brief Overview When embedding or integrating Power Apps with external web applications or APIs, Cross-Origin Resource Sharing (CORS) becomes a critical consideration. CORS is a browser security feature that restricts web pages from making requests to a different domain than the one that served the page, unless explicitly allowed. Key Points: Power Apps hosted on *.powerapps.com or within Microsoft 365 domains will block calls to external APIs unless those APIs include the proper CORS headers. The external API must return: Access-Control-Allow-Origin: https://apps.powerapps.com (or * for all origins, though not recommended for production) Access-Control-Allow-Methods: GET, POST, OPTIONS (or as needed) Access-Control-Allow-Headers: Content-Type, Authorization (and any custom headers) If the API requires authentication (e.g., OAuth 2.0), ensure preflight OPTIONS requests are handled correctly. For scenarios where you cannot modify the external API, consider using: Power Automate flows as a proxy Azure API Management or Azure Functions to inject CORS headers Always validate security implications before enabling wide-open CORS. If the CORS are not setup. You will encounter following error in copilot studio after pressing F12 (Browser Developer) CORS policy — blocking the container app Azure container app provides very efficient way of configuring CORS in the Azure portal. Lauch Azure Portal. Visit Azure container app i.e. streamable-mcp-server2 in this case. Click on CORS under Networking section. Configure the following in Allowed Origin Section as shown below. localhost is added to make it work from local laptop, although it is not required for Copilot Studio. 4. Click on “Allowed Method” tab and provide the following. 5. Provide wild card “*” in “Allowed Headers”tab. Although, it is not recommended for production system. it is done for the sake for simplicity. Configure that for added security 6. Click “Apply”. This will configure CORS for remote application. Test the MCP custom connector We are in the final stages of configuring the connector. It is time to test it, if everything is configured correctly and works. Launch the http://make.powerapps.com and click on “Custom connectors”, select your configured connector and click “5. Test” tab as shown below. You will see Selected Connection as blank if you are running it first time. Click “+ New connection” 2. New connection will launch the Authorization flow and browser dialog will pop up for making a request for authorization code. 3. Click “Create”. 4. Complete the login process. This will create a successful connection. 5. Click “Test operation”. If the response is 406 means everything is configured correctly as shown below. Solution validation Add user in Enterprise Application for App roles Roles have been defined under the required claims in the APIM inbound policy and also configured in the apim-mcp-backend-api app registration. As a result, any request from Copilot Studio will be denied if this role is not properly assigned. This role is included in the JWT access token, which we will validate in the following sections. To assign role, perform the following steps. Visit Azure Portal. Visit Enterprise Application. Select APIM backend app registration. In this case for example, apim-mcp-backend-api Click "Users and groups" Select "Add user/group" 5. Select User or Group who should have access to the role. 6. Click "Assign". It will look like as below. Note: Role assignment for users or groups is an important step. If it is not configured, MCP server tests will fail in Copilot studio. Test MCP server in Copilot Studio Lauch copilot studio and click on the Agent you created in earlier steps and click on “Tools tab”. Select your MCP tool as shown the following figure. Make sure it is “Enabled” if you have other tools attached to the same agent, disable them for now for testing. Make sure you have connection available which we created during the testing of custom connector in earlier step. You can also initiate a fresh connection by clicking on the drop down under “Connection” as shown below. Refreshing the tools will show all the tools available in this MCP server. Provide the sample prompt such as “Give me the stock price of tesla”. This will trigger the MCP server and call the respective method to bring the stock price of Tesla. Now try a weather-related question to see more. Now invoking weather forecast tool in the MCP server. APIM Monitoring with Log Analytics We previously configured APIM diagnostic settings to forward log data to Log Analytics. In this section, we’ll review that data, as the inbound policy in APIM sends valuable information to Log Analytics. Run the Kusto query to retrieve data from the last 30 minutes. As shown, the logs capture the APIM API endpoint URL and the backend URL, which corresponds to the Azure Container App endpoint. Scrolling further, we find the TraceRecords section. This contains the information captured by APIM inbound policies and sent to Log Analytics. The figure below illustrates the TraceRecords data. In the inbound policy, we configured it to extract details from the access token—such as the token itself, username, scope, and roles—and forward them to Log Analytics. Now let's capture the access token in the clip board, launch the http://jwt.io which is JSON Web Token (JWT) debugger, and paste the access token in the ENCODED VALUE box as show below. Note the following information. aud: This shows the Application URI ID of apim-mcp-backend-api. which shows access token is requested for that audience. appid: This shows the client Id for copilot-studio-client app registration. You can also see roles and scope. These roles are specified in APIM inbound policy. Note: As you can see, roles are included in access token and if it is not assigned in the enterprise application for "apim-mcp-backend-api", all requests will be denied by APIM inbound policy configured earlier. Perform a test using another Azure AD account that does not have the app role assigned Now, let's try the copilot studio agent by logging in with another account which is not assigned for the "mcp.read" role. Let's, review the below diagram. Logged in as demo and tried to access the MCP tool in copilot studio agent. Request failed with the error "Missing required scope or roles". If you look at it, this is coming from the APIM policy configured earlier in <on-error> Let's review log analytics. As you can see request failed due to inbound APIM policy with 403 error and there is no backend URL. Error is also reported under TraceRecords as we configured it in APIM policy. Now copy the Access token from log analytics and paste it into jwt.io. You can notice in the below diagram, there is no "roles" in the access token, resulting access denied from APIM inbound policy definition to the APIM backend i.e. azure container app. Assign the app role to the demo account Let's assign the "mcp.read" role to the demo account and test if it accesses the tool. Visit Azure Portal, Lauch Enterprise application, and select "apim-mcp-backend-api" as in this example. Click "Users and groups" Click "+ Add user/group" Select demo Click "Select" Click "Assign" End result would look like as shown below. Now, login again as demo. Make sure a new access token is generated. Access token refresh happens after one hours. As you can see in the image below, this time the request is successful after assigning the "mcp.read" app roles. Now let's review the log analytics entries. Let's review the access token in JWT.io. As you can see, roles are included in the access token. Conclusion Exposing the MCP server through Azure API Management (APIM) and integrating it with Copilot Studio agents provides a secure and scalable way to extend enterprise capabilities. By implementing OAuth 2.0, you ensure robust authentication and authorization, protecting sensitive data and maintaining compliance with industry standards. Beyond security, APIM adds significant operational value. With APIM policies, you can monitor traffic, enforce rate limits, and apply fine-grained controls to manage access and performance effectively. This combination of security and governance empowers organizations to innovate confidently while maintaining control and visibility over API usage. In today’s enterprise landscape, leveraging APIM with OAuth 2.0 for MCP integration is not just best practice—it’s a strategic move toward building resilient, secure, and well-governed solutions.Implementing MCP Remote Servers with Azure Function App and GitHub Copilot Integration
Introduction In the evolving landscape of AI-driven applications, the ability to seamlessly connect large language models (LLMs) with external tools and data sources is becoming a cornerstone of intelligent system design. Model Context Protocol (MCP) — a specification that enables AI agents to discover and invoke tools dynamically, based on context. While MCP is powerful, implementing it from scratch can be daunting !!! That’s where Azure Functions comes in handy. With its event-driven, serverless architecture, Azure Functions now supports a preview extension for MCP, allowing developers to build remote MCP servers that are scalable, secure, and cloud-native. Further, In VS Code, GitHub Copilot Chat in Agent Mode can connect to your deployed Azure Function App acting as an MCP server. This connection allows Copilot to leverage the tools and services exposed by your function app. Why Use Azure Functions for MCP? Serverless Simplicity: Deploy MCP endpoints without managing infrastructure. Secure by Design: Leverage HTTPS, system keys, and OAuth via EasyAuth or API Management. Language Flexibility: Build in .NET, Python, or Node.js using QuickStart templates. AI Integration: Enable GitHub Copilot, VS Code, or other AI agents to invoke your tools via SSE endpoints. Prerequisites Python version 3.11 or higher Azure Functions Core Tools >= 4.0.7030 Azure Developer CLI To use Visual Studio Code to run and debug locally: Visual Studio Code Azure Functions extension An storage emulator is needed when developing azure function app in VScode. you can deploy Azurite extension in VScode to meet this requirement. Press enter or click to view image in full size You can run the Azurite in VS Code as shown below. C:\Program Files\Microsoft Visual Studio\2022\Enterprise\Common7\IDE\Extensions\Microsoft\Azure Storage Emulator> .\azurite.exe Press enter or click to view image in full size alternatively, you can also run Azurite in docker container as shown below. docker run -p 10000:10000 -p 10001:10001 -p 10002:10002 \ mcr.microsoft.com/azure-storage/azurite For more information about setting up Azurite, visit Use Azurite emulator for local Azure Storage development | Microsoft Learn Github Repositories Following Github repos are needed to setup this PoC. Repository for MCP server using Azure Function App https://github.com/mafzal786/mcp-azure-functions-python.git Repository for AI Foundry agent as MCP Client https://github.com/mafzal786/ai-foundry-agent-with-remote-mcp-using-azure-functionapp.git Clone the repository Run the following command to clone the repository to start building your MCP server using Azure function app. git clone https://github.com/mafzal786/mcp-azure-functions-python.git Run the MCP server in VS Code Once cloned. Open the folder in VS Code. Create a virtual environment in VS Code. Change directory to “src” in a new terminal window, install the python dependencies and start the function host locally as shown below. cd src pip install -r requirements.txt func start Note: by default this will use the webhooks route: /runtime/webhooks/mcp/sse. Later we will use this in Azure to set the key on client/host calls: /runtime/webhooks/mcp/sse?code=<system_key> Press enter or click to view image in full size MCP Inspector In a new terminal window, install and run MCP Inspector. npx @modelcontextprotocol/inspector Click to load the MCP inspector. Also provide the generated proxy session token. http://127.0.0.1:6274/#resources In the URL type and click “Connect”: http://localhost:7071/runtime/webhooks/mcp/sse Once connected, click List Tools under Tools and select “hello_mcp” tool and click “Run Tool” for testing as shown below. Press enter or click to view image in full size Select another tool such as get_stockprice and run it as shown below. Press enter or click to view image in full size Deploy Function App to Azure from VS Code For deploying function app to azure from vs code, make sure you have Azure Tools extension enabled in VS Code. To learn more about Azure Tools extension, visit the following Azure Extensions if your VS code environment is not setup for Azure development, follow Configure Visual Studio Code for Azure development with .NET — .NET | Microsoft Learn Once Azure Tools are setup, sign in to Azure account with Azure Tools Press enter or click to view image in full size Once Sign-in is completed, you should be able to see all of your existing resources in the Resources view. These resources can be managed directly in VS Code. Look for Function App in Resource, right click and click “Deploy to Function App”. Press enter or click to view image in full size If you already have it deployed, you will get the following pop-up. Click “Deploy” Press enter or click to view image in full size This will start deploying your function app to Azure. In VS Code, Azure tab will display the following. Press enter or click to view image in full size Once the deployment is completed, you can view the function app and all the tools in Azure portal under function app as shown below. Press enter or click to view image in full size Get the mcp_extension key from Functions → App Keys in Function App. Press enter or click to view image in full size This mcp_extension key would be needed in mcp.json file in VS code, if you would like to test the MCP server using Github Copilot in VS Code. Your entries in mcp.json file will look like as below for example. { "inputs": [ { "type": "promptString", "id": "functions-mcp-extension-system-key", "description": "Azure Functions MCP Extension System Key", "password": true }, { "type": "promptString", "id": "functionapp-name", "description": "Azure Functions App Name" } ], "servers": { "remote-mcp-function": { "type": "sse", "url": "https://${input:functionapp-name}.azurewebsites.net/runtime/webhooks/mcp/sse", "headers": { "x-functions-key": "${input:functions-mcp-extension-system-key}" } }, "local-mcp-function": { "type": "sse", "url": "http://0.0.0.0:7071/runtime/webhooks/mcp/sse" } } } Test Azure Function MCP Server in MCP Inspector Launch MCP Inspector and provide the Azure Function in MCP inspector URL. Provide authentication as shown below. Bearer token is mcp_extension key. Testing an MCP server with GitHub Copilot Testing an MCP server with GitHub Copilot involves configuring and utilizing the server within your development environment to provide enhanced context and capabilities to Copilot Chat. Steps to Test an MCP Server with GitHub Copilot: Ensure Agent Mode is Enabled: Open Copilot Chat in Visual Studio Code and select “Agent” mode. This mode allows Copilot to interact with external tools and services, including MCP servers. Add the MCP Server: Open the Command Palette (Ctrl+Shift+P or Cmd+Shift+P) and run the command MCP: Add Server. Press enter or click to view image in full size Follow the prompts to configure the server. You can choose to add it to your workspace settings (creating a .vscode/mcp.json file) . Select HTTP or Server-Sent events Press enter or click to view image in full size Specify the URL and click Enter Press enter or click to view image in full size Provide a name of your choice Press enter or click to view image in full size Select scope as Global or workspace. I selected Workspace Press enter or click to view image in full size This will generate mcp.json file in .vscode or create a new entry if mcp.json already exists as shown below. Click Start to “start” the server. Also make sure your Azure function app is locally running with func start command. Press enter or click to view image in full size Now Type the prompt as shown below. Press enter or click to view image in full size Try another tool as below. Press enter or click to view image in full size VS code terminal output for reference. Press enter or click to view image in full size Testing an MCP server with Claude Desktop Claude Desktop is a standalone AI application that allows users to interact with Claude AI models directly from their desktop, providing a seamless and efficient experience. you can download Claude desktop at Download Claude In this article, I have added another tool to utilize to test your MCP server running in Azure Function app. Modify claude_desktop_config.json with the following. you can find this file in window environment at C:\Users\<username>\AppData\Roaming\Claude { "mcpServers": { "my mcp": { "command": "npx", "args": [ "mcp-remote", "http://localhost:7071/runtime/webhooks/mcp/sse" ] } } } Note: If claude_desktop_config.json does not exists, click on setting in Claude desktop under user and visit developer tab. You will see you MCP server in Claude Desktop as shown below. Press enter or click to view image in full size Type the prompt such as “What is the stock price of Tesla” . After submitting, you will notice that it is invoking the tool “get_stockprice” from the MCP server running locally and configured in the .json earlier. Click Allow once or Allow always as shown below. Following output will be displayed. Press enter or click to view image in full size Now lets try weather related prompt. As you can see, it has invoked “get_weatheralerts” tool from MCP server. Press enter or click to view image in full size Azure AI Foundry agent as MCP Client Use the following Github repo to set up Azure AI Foundry agent as MCP client. git clone https://github.com/mafzal786/ai-foundry-agent-with-remote-mcp-using-azure-functionapp.git Open the code in VS code and follow the instructions mentioned in README.md file at Github repo. Once you execute the code, following output will show up in VS code. Press enter or click to view image in full size In this code, message is hard coded. Change the content to “what is weather advisory for Florida” and rerun the program. It will call get_weatheralerts tool and output will look like as below. Press enter or click to view image in full size Conclusion The integration of Model Context Protocol (MCP) with Azure Functions marks a pivotal step in democratizing AI agent development. By leveraging Azure’s serverless architecture, developers can now build remote MCP servers that scale automatically, integrate seamlessly with other Azure services, and expose modular tools to intelligent agents like GitHub Copilot. This setup not only simplifies the deployment and management of MCP servers but also enhances the developer experience — allowing tools to be invoked contextually by AI agents in environments like VS Code, GitHub Codespaces, or Copilot Studio[2]. Whether you’re building a tool to query logs, calculate metrics, or manage data, Azure Functions provides the flexibility, security, and scalability needed to bring your AI-powered workflows to life. As the MCP spec continues to evolve, and GitHub Copilot expands its agentic capabilities, this architecture positions you to stay ahead — offering a robust foundation for cloud-native AI tooling that’s both powerful and future-proof.The Future of AI Is: Model Choice - From Structured Process To Seamless Platform
Language models are at the heart of generative AI applications. But in just over a year, we've moved from a handful of model providers to 1M+ community variants and more, resulting in the paradox of choice that ends in decision fatigue. In this blog post, we'll look at how developers can rethink their model selection strategy with a structured decision-making process, and a seamless development platform, to help them. This post is part of the Future of AI series jumpstarted by Marco Casalaina with his post on Exploring Multi-Agent AI Systems.The Future of AI: GraphRAG – A better way to query interlinked documents
All language models are trained on a huge corpus of data. They have some world knowledge and can answer a range of questions about different things. However, due to their probabilistic nature and incomplete world knowledge, especially when it comes to different niches and domains, it’s possible to receive incorrect answers. Retrieval Augmented Generation (RAG) helps augment world knowledge with enterprise-specific references, reducing inaccuracies and inconsistencies in the generated text. How RAG works and improves LLM output In RAG, the corpus of text relevant to your domain is converted into embeddings. Embeddings are created by translating documents into a mathematical form based on their traits, factors, and categories. The resulting vector representation is a long sequence of numbers. The distance between two vectors indicates how closely related they are. Similar objects are positioned closer together in a multi-dimensional embedding space, while less similar objects are positioned farther apart. As the term signifies, RAG consists of three steps – First the relevant vectors related to the query are retrieved (typically from a vector database), then the prompt which is sent to the LLM is augmented with this relevant contextual information, and finally the LLMs generates an answer based on this context and query. Using the RAG approach, developers can extend the factual grounding of the model, improve the relevance, accuracy and quality of the answers generated by the LLMs, and in many cases, refer back to the document snippets which were used in the generation of the answer. RAG has emerged as a powerful approach that combines the strengths of information retrieval and generative models. How GraphRAG builds upon RAG approach Though RAG improves on the LLMs generative capabilities, RAG does sometimes struggle to make sense of concepts and relationships between them when they are spread across documents. Also, as the complexity of data structures grows, there is a need for more advanced systems capable of handling interconnected, multi-faceted information. This is where GraphRAG comes into play. GraphRAG is an advanced version of RAG that utilizes graph-based retrieval mechanisms, enhancing the generation process by capturing richer, more contextual information. GraphRAG improves over vector RAG in the following ways. Enhanced Contextual Understanding with Graphs RAG traditionally uses a flat retrieval system (through embeddings in a vector DB), where it retrieves documents (and relevant document fragments) from a knowledge base based on their relevance to a query. The generative model then uses these retrieved documents to generate a response. While effective, this method can struggle when information is spread across multiple, interconnected documents. GraphRAG, on the other hand, uses graph-based retrieval, which allows it to connect pieces of information across a web of nodes. Each node represents an entity or a concept, and the edges represent the relationships between them. Examples of this could be relations like “is part of,” “is cousin of,” or “is made of.” This structured approach enables GraphRAG to extract and utilize more nuanced, multi-layered contextual information, resulting in more coherent and accurate responses. Improved Knowledge Integration In RAG, the generative model can sometimes produce fragmented or inconsistent outputs when the retrieved documents lack cohesion because of the way the chunking process and embedding vectors work. GraphRAG solves this by using graph databases that can model complex relationships. Graph Databases store both the entities represented by nodes and the relationships connecting them. They make it possible to traverse nodes using relationships between them. By understanding the connections between different pieces of information, GraphRAG can integrate knowledge from diverse sources and provide a more unified and accurate response. For example, if a question involves multiple entities and their interactions (e.g., "How does the supply chain impact product availability during a pandemic?"), GraphRAG can navigate through the interconnected data points, understand their dependencies, and generate a comprehensive answer. Another good example is compliance information for related documents and references to concepts in compliance. Let’s assume you are opening a restaurant and want to know different regulations needed to open a kitchen. Regulations can span fire safety, hygiene, food storage, ingredient sourcing, insurance, and labour guidelines. GraphRAG can work in such a scenario to collect all the references, traversing the relationships between them, giving users a coherent answer spanning a collection of documents. Efficiency and Scalability Another key metric, especially for large, interconnected datasets, is efficiency. RAG requires scanning through multiple documents for relevant content, which can be resource-intensive, especially with vast datasets. GraphRAG’s graph-based structure can efficiently traverse the data by focusing on relevant nodes and relationships, reducing computational overhead. Using GraphRAG intelligently, developers can use a combination of graph traversals of knowledge graphs and vector search to reduce computation and memory overheads. This s better, more intelligent indexing over traditional approaches. Moreover, graphs can be scaled horizontally, allowing for the expansion of knowledge bases without significantly increasing retrieval times. This makes GraphRAG suitable for enterprise-level applications where scalability and performance are critical. Also, when an organization spans many different vertical domains, this helps focus the search. So, you have the advantage both in terms of scalability and performance. GraphRAG Implementation Now that we know the benefits of GraphRAG, let’s implement an approach using GraphRAG. Setup For this demonstration we will use, we will use the GPT-4o as the LLM model in Azure AI Studio and text-embedding-3-small as the embedding model to generate embeddings on the platform. We will use the open source lancedb to store the embeddings and retrieve them for GraphRAG. There are many other models available via the Azure AI model catalog which has a variety of LLMs, SLMs, and embedding models. Let’s now create the deployments using Azure AI Studio for both these models. Next, let’s open a session on WSL to create a virtual env for Python. We will be using the Python package for GraphRAG for this demo. # Create a graphrag directory and change directory to try out this example $ mkdir graphrag $ cd graphrag/ # Install virtualenv package, create a virtual environment called venv_name # & change directory to it. We create a virtual environment so we can safely # install and experiment with package without changing the global Python # environment $ sudo apt-get install python3-virtualenv $ virtualenv -p python3 venv_name $ cd venv_name/ # Activate the virtual environment $ source bin/activate # Next, install the Python GraphRAG package in the virtual environment # created. This will download and install a number of packages and may # take a little time. Amongst other things, it will install the opensource # DataShaper data processing library that allows users to declaratively # express data pipelines, schemas, and related assets using well-defined # schemas $ pip install graphrag For the purposes of this demo, we will use the text of the Mahabharata. The Mahabharata is an epic Indian classical text that is divided into 18 chapters with a multitude of characters. It narrates the events that lead to the Kurukshetra war between two warring clans of cousins – Kauravas and Pandavas and the aftermath of the war. There are more than 100 human characters in the text who interact with each other and are also related to each other in some way. You can read about the epic text here and read about the many characters. We will use one of the translations of the epic text from project Gutenberg which is in the public domain. # Create the directory for input text and download the file using curl and # store it in the input directory. Though this is one document it consists of # many parts. The word count (634955) and line count (58868) in the # example below can be seen using wc commandline utility. $ mkdir -p ./mahabharata/input $ curl curl https://www.gutenberg.org/cache/epub/15474/pg15474.txt -o ./mahabharata/input/book.txt $ wc input/book.txt 58868 634955 3752942 input/book.txt # Next, we will initialize the environment for GraphRAG using the command: $ python -m graphrag.index --init --root ./mahabharata/ This will create a .env file and a settings.yaml file in the mahabharata directory. .env contains the environment variables required to run the GraphRAG pipeline. If the file is edited, a single environment variable will be defined, GRAPHRAG_API_KEY=<API_KEY>. This is the API key for the OpenAI API or Azure OpenAI Service endpoint. This can be replaced with an API key. API keys and other settings can be seen in the screenshot below (red highlight) in Azure AI Studio. In the llm section of settings.yaml, configure the following settings, llm: api_key: ${GRAPHRAG_API_KEY} type: azure_openai_chat # or openai_chat model: gpt-4o model_supports_json: true # recommended if this is available for your model. api_base: https://<your_instance_details>.openai.azure.com api_version: 2024-08-01-preview # please replace with your version deployment_name: gpt-4o In the embeddings section of settings.yaml , configure the following settings, llm: api_key: ${GRAPHRAG_API_KEY} type: azure_openai_embedding model: text-embedding-3-small api_base: https://<your_instance_details>.openai.azure.com api_version: 2024-08-01-preview # please replace with your version deployment_name: text-embedding-3-small Next, run the indexing process as a precursor to creating the embeddings. This will create a log to track the indexing process. This will start the chunking process, create the entities, figure out the relationship between different entities, generate graph relationships between the entities and finally after multiple processing create the final documents to be stored for retrieval in lanceDB. If the process is complete successfully, a message will appear which says, “All workflows completed successfully.” Note, there will be many warnings about deprecation which can be safely ignored - for now. $ python -m graphrag.index --root ./mahabharata/ Now that the embeddings have been created successfully, let's run a couple of queries to see if we can get answers about the characters and the relationships between them. $ python -m graphrag.query --root ./mahabharata --method global "Who is Duryodhana and How is he related to Arjuna?" creating llm client with {'api_key': 'REDACTED,len=32', 'type': "azure_openai_chat", 'model': 'gpt-4o', 'max_tokens': 4000, 'temperature': 0.0, 'top_p': 1.0, 'n': 1, 'request_timeout': 180.0, 'api_base': 'https://graphragdemo-inst.openai.azure.com', 'api_version': '2024-08-01-preview', 'organization': None, 'proxy': None, 'cognitive_services_endpoint': None, 'deployment_name': 'gpt-4o', 'model_supports_json': True, 'tokens_per_minute': 0, 'requests_per_minute': 0, 'max_retries': 10, 'max_retry_wait': 10.0, 'sleep_on_rate_limit_recommendation': True, 'concurrent_requests': 25} SUCCESS: Global Search Response: ### Duryodhana: A Central Figure in the Mahabharata Duryodhana is a pivotal character in the Indian epic, the Mahabharata. He is the eldest son of Dhritarashtra and Gandhari, making him the leader of the Kauravas, a group of a hundred brothers [Data: Reports (408, 397, 400, 275, +more)]. Duryodhana is known for his deep-seated enmity towards the Pandavas, particularly Arjuna, and his significant role in the Kurukshetra War, where he stands as a central antagonist [Data: Reports (408, 397, 569, 216, +more)]. ### Relationship with Arjuna Duryodhana and Arjuna are first cousins. Duryodhana is the son of Dhritarashtra, while Arjuna is the son of Pandu. Dhritarashtra and Pandu are brothers, making Duryodhana and Arjuna part of the same Kuru dynasty [Data: Reports (255, 398, 285, 177, 202, +more)]. This familial connection places them in direct conflict over the throne of Hastinapura, leading to the epic battle of Kurukshetra [Data: Reports (399, 216, 406, 440, +more)]. ### Rivalry and Conflict The relationship between Duryodhana and Arjuna is marked by intense rivalry and conflict. Duryodhana's ambition to rule Hastinapura and his enmity towards the Pandavas drive much of the narrative in the Mahabharata. This enmity is particularly highlighted during the Kurukshetra War, where Duryodhana leads the Kauravas against Arjuna and the Pandavas [Data: Reports (408, 397, 273, 202, +more)]. Their rivalry is a central theme in the epic, culminating in numerous battles and deceitful plots, including the infamous game of dice that led to the Pandavas' exile [Data: Reports (398, 255, 400, 256, +more)]. ### Conclusion Duryodhana's character is defined by his leadership of the Kauravas and his antagonistic relationship with the Pandavas, especially Arjuna. Their familial ties and subsequent rivalry form the crux of the Mahabharata's narrative, leading to the monumental conflict of the Kurukshetra War [Data: Reports (408, 397, 569, 216, +more)]. Let’s try another query for another character called Karna. $ python -m graphrag.query --root ./mahabharata --method global "Who is Karna and what are his main relationships?" creating llm client with {'api_key': 'REDACTED,len=32', 'type': "azure_openai_chat", 'model': 'gpt-4o', 'max_tokens': 4000, 'temperature': 0.0, 'top_p': 1.0, 'n': 1, 'request_timeout': 180.0, 'api_base': 'https://graphragdemo-inst.openai.azure.com', 'api_version': '2024-08-01-preview', 'organization': None, 'proxy': None, 'cognitive_services_endpoint': None, 'deployment_name': 'gpt-4o', 'model_supports_json': True, 'tokens_per_minute': 0, 'requests_per_minute': 0, 'max_retries': 10, 'max_retry_wait': 10.0, 'sleep_on_rate_limit_recommendation': True, 'concurrent_requests': 25} SUCCESS: Global Search Response: ### Karna: A Key Figure in the Mahabharata Karna, also known as the Son of Radha, Vasusena, and Radheya, is a pivotal character in the Indian epic, the Mahabharata. He is renowned for his exceptional martial prowess, unwavering loyalty, and tragic life. Born to Kunti and the Sun God, Surya, Karna's divine heritage endowed him with extraordinary abilities, including natural armor and ear-rings that made him nearly invincible [Data: Reports (373, 198, 465, 502, 155, +more)]. ### Key Relationships #### **Duryodhana** Karna's most significant relationship is with Duryodhana, the leader of the Kauravas. Duryodhana befriends Karna and installs him as the king of Anga, solidifying their bond. This relationship is marked by deep loyalty and mutual support, with Karna vowing to slay Arjuna and supporting Duryodhana in various schemes against the Pandavas [Data: Reports (390, 397, 373, 198, 465, +more)]. Karna's loyalty to Duryodhana is a defining aspect of his character, influencing many of his actions and decisions throughout the epic [Data: Reports (447, 440, 391, 383, 302)]. #### **Kunti** Karna's relationship with his mother, Kunti, is complex and filled with emotional tension. Kunti reveals to Karna that he is her son, born before her marriage to Pandu, which adds a layer of tragedy to his character. Despite this revelation, Karna chooses to remain loyal to Duryodhana and fight against his half-brothers, the Pandavas [Data: Reports (373, 198, 465, 502, 155, +more)]. #### **Arjuna** Karna's rivalry with Arjuna, one of the Pandavas, is a central theme in the Mahabharata. Both warriors are considered equals in skill and valor, and their final confrontation in the Kurukshetra war is one of the epic's most significant events. Karna's enmity with Arjuna is fueled by his loyalty to Duryodhana and his desire to prove his worth [Data: Reports (373, 198, 465, 502, 155, +more)]. #### **Surya** Karna's divine father, Surya, plays a crucial role in his life, often providing guidance and warnings. For instance, Surya forewarns Karna about Indra's intentions to obtain his ear-rings and coat of mail, which are sources of his invincibility [Data: Reports (518, 547, 391, 358, 371)]. #### **Indra** Karna's interactions with Indra, the king of the gods, are also notable. Indra, disguised as a Brahmin, tricks Karna into giving up his ear-rings and armor, which were his sources of invincibility. In return, Indra grants Karna a powerful weapon, the Sakti, which he can use only once [Data: Reports (302, 394)]. ### Conclusion Karna's life is marked by his unwavering loyalty to Duryodhana, his complex relationships with his mother Kunti and his half-brother Arjuna, and his divine heritage. These relationships shape his actions and decisions, making him one of the most compelling and tragic figures in the Mahabharata [Data: Reports (390, 397, 373, 198, 465, +more)]. GraphRAG is able to piece together the relevant bits from different parts of the chapters to offer get us the relationship between the different characters with references (data reports or chunks). In some cases, it can do this over many different chunks of data over a large text. This is a huge improvement over the baseline performance of large language models and baseline vector RAG. In a recent Benchmark paper, it was found that knowledge graphs can improve the accuracy of answers up to 3x (54.2% vs 16.7%). GraphRAG can also be used in applications to make them more scalable and accurate, especially for domain-specific applications. Also, if you are working with many documents such as in data lake or running this is production, I would suggest using Azure AI search as the vector store. The GraphRAG accelerator, More information about GraphRAG and Azure AI Studio is available in the resources below: Resources: Learn more about GraphRAG Build with Azure AI Studio – https://ai.azure.com Review the Azure AI Studio documentation - https://learn.microsoft.com/en-us/azure/ai-studio/ Access Azure AI Studio Learn modules - https://learn.microsoft.com/en-us/training/modules/introduction-to-azure-ai-studio/ Access the Fundamental of Generative AI learning course- https://learn.microsoft.com/en-us/training/modules/fundamentals-generative-ai/ Access the GraphRAG GitHub repository - - https://github.com/microsoft/graphrag/ Use the GraphRAG Solution accelerator - https://github.com/Azure-Samples/graphrag-acceleratorThe Future of AI: Generative AI for...Time Series Forecasting?!? A Look at Nixtla TimeGEN-1
Have you ever wondered how meteorologists predict tomorrow's weather, or how businesses anticipate future sales? These predictions rely on analyzing patterns over time, known as time series forecasts. With advancements in artificial intelligence, forecasting the future has become more accurate and accessible than ever before. Understanding Time Series Forecasting Time series data is a collection of observations recorded at specific time intervals. Examples include daily temperatures, monthly sales figures, or hourly website visitors. By examining this data, we can identify trends and patterns that help us predict future events. Forecasting involves using mathematical models to analyze past data and make informed guesses about what comes next. Traditional Forecasting Methods: ARIMA and Prophet Two of the most popular traditional methods for doing time series forecasting are ARIMA and Prophet. ARIMA, which stands for AutoRegressive Integrated Moving Average, predicts future values based on past data. It involves making the data stationary by removing trends and seasonal effects, then applying statistical techniques. However, ARIMA requires manual setup of parameters like trends and seasonality, which can be complex and time-consuming. It's best suited for simple, one-variable data with minimal seasonal changes. Prophet, a forecasting tool developed by Facebook (now Meta), automatically detects trends, seasonality, and holiday effects in the data, making it more user-friendly than ARIMA. Prophet works well with data that has strong seasonal patterns and doesn't need as much historical data. However, it may struggle with more complex patterns or irregular time intervals. Introducing Nixtla TimeGEN-1: A New Era in Forecasting Nixtla TimeGEN-1 represents a significant advancement in time series forecasting. Unlike traditional models, TimeGEN-1 is a generative pretrained transformer model, much like the GPT models, but rather than working with language, it's specifically designed for time series data. It has been trained on over 100 billion data points from various fields such as finance, weather, energy, and web data. This extensive training allows TimeGEN-1 to handle a wide range of data types and patterns. One of the standout features of TimeGEN-1 is its ability to perform zero-shot inference. This means it can make accurate predictions on new datasets without needing additional training. It can also be fine-tuned on specific datasets for even better accuracy. TimeGEN-1 handles irregular data effortlessly, working with missing timestamps or uneven intervals. Importantly, it doesn't require users to manually specify trends or seasonal components, making it accessible even to those without deep technical expertise. The transformer architecture of TimeGEN-1 enables it to capture complex patterns in data that traditional models might miss. It brings the power of advanced machine learning to time series forecasting – and related tasks like anomaly detection – making the process more efficient and accurate. Real-World Comparison: TimeGEN-1 vs. ARIMA and Prophet To test these claims, I decided to run an experiment to compare the performance of TimeGEN-1 with ARIMA and Prophet. I used a retail dataset where the actual future values were known, which in data science parlance is known as a "backtest." In my dataset, ARIMA struggled to predict future values accurately due to its limitations with complex patterns. Prophet performed better than ARIMA by automatically detecting some patterns, but its predictions still didn't quite hit the mark. TimeGEN-1, however, delivered predictions that closely matched the actual data, significantly outperforming both ARIMA and Prophet. The accuracy of these models was measured using metrics like Mean Absolute Error (MAE) and Root Mean Squared Error (RMSE). TimeGEN-1 had the lowest MAE and RMSE, indicating higher accuracy. This experiment highlights how TimeGEN-1 can provide more precise forecasts, even when compared to established methods. The Team Behind TimeGEN-1: Nixtla Nixtla is a company dedicated to making advanced predictive insights accessible to everyone. It was founded by a team of experts passionate about simplifying forecasting processes while maintaining high accuracy and efficiency. The team includes Max Mergenthaler Canseco, CEO; Azul Garza, CTO; and Cristian Challu, CSO, experts in the forecasting field with extensive experience in machine learning and software engineering.< Their collective goal is to simplify the forecasting process, making powerful tools available to users with varying levels of technical expertise. By integrating TimeGEN-1 into easy-to-use APIs, they ensure that businesses and individuals can leverage advanced forecasting without needing deep machine learning knowledge. The Azure AI Model Catalog TimeGEN-1 is one of the 1700+ models that are now available in the Azure AI model catalog. The model catalog is continuously updated with the latest advancements, like TimeGEN-1, ensuring that users have access to the most cutting-edge tools. Its user-friendly interface makes it easy to navigate and deploy models, and Azure's cloud infrastructure provides the scalability needed to run these models, allowing users to handle large datasets and complex computations efficiently. In the following video, I show how Data Scientists and Developers can build time series forecasting models using data stored in Microsoft Fabric paired with the Nixtla TimeGEN-1 model. The introduction of Nixtla TimeGEN-1 marks a transformative moment in time series forecasting. Whether you're a data scientist, a business owner, or a student interested in AI, TimeGEN-1 opens up new possibilities for understanding and predicting future trends. Explore TimeGEN-1 and thousands of other models through the Azure AI model catalog today!
