Performance Tuning Cold Starts, Scaling Delays, and Startup Latency in Azure Container Apps
Introduction There is a particular kind of frustration that comes not when your application fails to start, but when it starts too slowly. The container is running, the health probes pass, your monitoring shows green — and yet every few minutes a user somewhere in the world hits a request that takes 15 seconds to respond. Your support team starts getting tickets. Your SLA dashboard turns amber. This is the cold start problem, and it is one of the most widely discussed pain points with any serverless container platform. Azure Container Apps is no different. But what most engineers do not realize is that the cold start is only one part of the story. Scaling delays, inefficient image layers, wrong resource allocations, and misconfigured KEDA rules all compound to create latency spikes that feel indistinguishable from cold starts but have completely different root causes and fixes. In this part of the series, we break down each cause systematically and show you exactly how to address it. Understanding What "Cold Start" Actually Means in Container Apps Before we fix anything, it helps to understand what is actually happening during a cold start. When a new replica is created, Azure Container Apps needs to do several things in sequence before your application can serve a single request: The platform schedules the new replica on available infrastructure. The container runtime pulls the image layers that are not already cached on that node. The container starts and the process inside it begins executing. Your application framework initializes (the .NET DI container, Django's ORM layer, loaded ML models, etc.). The readiness probe passes, signaling that the replica can accept traffic. Every one of these steps takes time. The total duration is your cold start latency. When you have `minReplicas: 0`, this full cycle happens for every "first request after idle" scenario. With `minReplicas: 1`, steps 1 and 2 are already done, but steps 3–5 still happen whenever a new replica is created due to scaling out. Scenario 1: Requests Spike to 10+ Seconds After a Period of Inactivity What You See Everything looks fine during load testing, but the next morning after a quiet night, the first user to hit the app gets a timeout or a very slow response. You check your Application Insights or Log Analytics and you see exactly one request with a dramatically higher duration than all the others. Why This Happens You have `minReplicas` set to `0` (or it defaults to 0). When there are no replicas running and a new request arrives, the entire cold start sequence kicks off — and the request waits in the ingress queue the entire time. Depending on your image size and application initialization time, this can easily reach 15–30 seconds for a .NET application with a large DI graph, or even longer for a Python application that imports heavy libraries. The Fix Option A (Recommended for most workloads): Set `minReplicas` to 1. This ensures at least one replica is always warm and ready to handle requests. You will pay for that one replica's compute even during idle periods, but you eliminate the cold start for your users: az containerapp update --name my-dotnet-api --resource-group my-rg --min-replicas 1 --max-replicas 10 Or in your Container App YAML: scale: minReplicas: 1 maxReplicas: 10 rules: - name: http-scaling-rule http: metadata: concurrentRequests: "10" Option B: Reduce image size to speed up the pull. Every megabyte in your container image adds time to cold starts. A production .NET API should not be a 2 GB image. Use multi-stage builds to strip away the SDK, test tools, and development dependencies: # Stage 1: Build FROM mcr.microsoft.com/dotnet/sdk:8.0 AS build WORKDIR /src COPY ["MyApp.csproj", "."] RUN dotnet restore COPY . . RUN dotnet publish -c Release -o /app/publish --no-restore # Stage 2: Runtime only - much smaller FROM mcr.microsoft.com/dotnet/aspnet:8.0 AS final WORKDIR /app COPY --from=build /app/publish . # Run as non-root for security USER app EXPOSE 8080 ENTRYPOINT ["dotnet", "MyApp.dll"] For Django, the equivalent pattern is: FROM python:3.11-slim AS base # Install only production dependencies WORKDIR /app COPY requirements.txt . RUN pip install --no-cache-dir -r requirements.txt && find /usr/local -name "*.pyc" -delete && find /usr/local -name "__pycache__" -type d -exec rm -rf {} + 2>/dev/null || true COPY . . RUN SECRET_KEY=placeholder python manage.py collectstatic --noinput USER nobody EXPOSE 8000 CMD ["gunicorn", "myproject.wsgi:application", "--bind", "0.0.0.0:8000", "--workers", "2"] Option C: Use a startup probe to manage the readiness window. If your app genuinely needs 20–30 seconds to initialize (loading configuration, warming caches, establishing connection pools), configure a startup probe separately from your liveness probe. This gives the container time to start without the liveness probe killing it prematurely: probes: - type: Startup httpGet: path: /health port: 8080 initialDelaySeconds: 5 periodSeconds: 5 failureThreshold: 12 # 12 * 5s = 60 seconds total window - type: Liveness httpGet: path: /health port: 8080 periodSeconds: 10 failureThreshold: 3 - type: Readiness httpGet: path: /health/ready port: 8080 periodSeconds: 5 failureThreshold: 3 Scenario 2: New Replicas Lag Behind Traffic Spikes What You See Your application handles steady traffic just fine. Then a sudden burst arrives — a marketing email goes out, a scheduled batch job triggers API calls, or a downstream system fires webhooks — and for 30–60 seconds your error rate jumps and your latency spikes. After that window, everything recovers. The scaling logs show new replicas were created, but they came online too late. Why This Happens KEDA (the scaling engine behind Container Apps) works reactively. By default, HTTP-based scaling triggers new replicas when concurrent requests exceed the configured threshold. But there is an inherent delay between the moment traffic spikes, the moment KEDA detects it, and the moment a new replica is warm and serving traffic. This window is where your users experience the pain. Additionally, if your image pull takes a long time (large image, first pull on a new node), the new replica arrives even later. KEDA cannot compensate for slow image pulls. The Fix Step 1 — Tune your KEDA scaling rules to trigger earlier. Rather than waiting until you are already at capacity, configure scaling to trigger with a lower concurrency threshold. If your app can handle 20 concurrent requests comfortably, set the threshold to 10 so new replicas spin up before you are overwhelmed: scale: minReplicas: 1 maxReplicas: 20 rules: - name: http-rule http: metadata: concurrentRequests: "10" # Scale earlier, not at capacity For Azure Service Bus or Event Hubs-triggered scaling (common in job-style workloads), use a queue length threshold that gives you a buffer: scale: minReplicas: 0 maxReplicas: 30 rules: - name: servicebus-rule custom: type: azure-servicebus metadata: queueName: my-processing-queue namespace: my-servicebus-namespace messageCount: "5" # Scale when queue depth reaches 5, not 100 auth: - secretRef: servicebus-connection triggerParameter: connection Step 2 — Pre-warm your connection pools in .NET. One of the biggest contributors to new replica slowness is the time spent establishing database connections and other external connections. The first request that hits a new replica bears the cost of opening the connection pool. Configure your connection pool to warm up eagerly at startup: // In Program.cs, after building the app if (app.Environment.IsProduction()) { // Warm up the database connection pool before accepting traffic using var scope = app.Services.CreateScope(); var dbContext = scope.ServiceProvider.GetRequiredService<AppDbContext>(); await dbContext.Database.ExecuteSqlRawAsync("SELECT 1"); } await app.RunAsync(); Step 3 — Enable HTTP/2 keep-alive and connection reuse. In .NET applications running behind the Container Apps ingress, configure your HTTP client to use connection pooling properly: builder.Services.AddHttpClient("downstream-api", client => { client.BaseAddress = new Uri("https://my-downstream-service"); client.DefaultRequestVersion = new Version(2, 0); }) .ConfigurePrimaryHttpMessageHandler(() => new SocketsHttpHandler { PooledConnectionLifetime = TimeSpan.FromMinutes(5), PooledConnectionIdleTimeout = TimeSpan.FromMinutes(2), MaxConnectionsPerServer = 20 }); Scenario 3: Django Startup Is Slow Due to Import Time What You See Your Django application takes 8–12 seconds to start even on a warm node. You check the Gunicorn startup logs and see it spending most of that time in Python module imports before it ever processes a request. Why This Happens Python's import system is synchronous and single-threaded. When you import `django`, `rest_framework`, `pandas`, `numpy`, or any large library, Python reads and executes every module file in the dependency chain. A Django project with Django REST Framework, Celery, and a few third-party packages can easily spend 5–8 seconds just on imports. Multiply that by the number of Gunicorn workers (each is a separate process that imports everything independently) and startup time balloons. The Fix Step 1 — Profile import time to find the worst offenders. Add this to your Dockerfile's entrypoint or run it manually: # Run this in a container shell to see which imports take the longest python -X importtime -c "import django; django.setup()" 2>&1 | sort -k2 -rn | head -20 Step 2 — Use lazy imports for heavy dependencies that are not needed at startup. Instead of importing everything at the module level, defer imports to the functions that actually need them: # Instead of this at the top of your file: import pandas as pd import numpy as np # Do this — import only when the function is actually called: def process_data(data): import pandas as pd import numpy as np df = pd.DataFrame(data) return df.describe().to_dict() Step 3 — Reduce Gunicorn worker count for memory-constrained environments. Having too many workers means too many independent Python processes all importing everything at the same time. For Container Apps with 0.5–1 vCPU, 2 workers is usually the right starting point: CMD ["gunicorn", "myproject.wsgi:application", "--bind", "0.0.0.0:8000", "--workers", "2", "--worker-class", "gthread", "--threads", "4", "--timeout", "120", "--keep-alive", "5", "--log-level", "info"] Step 4 — Consider switching from Gunicorn to Uvicorn for async Django. If you are on Django 4.x with ASGI support, Uvicorn with async workers can handle significantly more concurrent requests per worker than synchronous Gunicorn workers: CMD ["uvicorn", "myproject.asgi:application", "--host", "0.0.0.0", "--port", "8000", "--workers", "2", "--log-level", "info"] Scenario 4: Resource Limits Are Causing Throttling and Slow Responses What You See Your application starts fine and handles light traffic well, but under moderate to heavy load — even well below your max replicas — individual requests become slow and CPU metrics show your replicas running near 100% utilization. You may also see the .NET GC (garbage collector) running very frequently, or Django showing slow database queries that are actually fast queries being delayed because the process has no CPU to run. Why This Happens Container Apps defaults to 0.25 vCPU and 0.5 Gi memory if you do not specify resource limits. For a production .NET API or a Django application serving real traffic, this is almost always too little. When a container hits its CPU limit, the container runtime throttles it — the process continues to run but gets less CPU time, making everything slower without any obvious error signal. The Fix Step 1 — Measure actual resource usage before guessing. Query Log Analytics for actual CPU and memory usage to establish a baseline: ContainerAppSystemLogs_CL | where ContainerAppName_s == "my-dotnet-api" | where TimeGenerated > ago(7d) | summarize AvgCpuUsage = avg(todouble(CpuUsageNanoCores_d)) / 1000000, MaxCpuUsage = max(todouble(CpuUsageNanoCores_d)) / 1000000, AvgMemoryMB = avg(todouble(MemoryWorkingSetBytes_d)) / 1048576, MaxMemoryMB = max(todouble(MemoryWorkingSetBytes_d)) / 1048576 by bin(TimeGenerated, 1h) | order by TimeGenerated desc Step 2 — Update resource allocations based on what you observed. az containerapp update --name my-dotnet-api --resource-group my-rg --cpu 0.5 --memory 1.0Gi Container Apps has specific valid CPU/memory combinations. The valid pairs are: `0.25 vCPU / 0.5 Gi`, `0.5 vCPU / 1.0 Gi`, `0.75 vCPU / 1.5 Gi`, `1.0 vCPU / 2.0 Gi`, and up to `4.0 vCPU / 8.0 Gi`. You cannot mix arbitrary values. Step 3 — Configure .NET GC for server workloads. By default, .NET uses the workstation GC mode which is tuned for interactive applications. For server containers, use server GC mode and configure the heap size appropriately: // In runtimeconfig.template.json or via environment variables { "configProperties": { "System.GC.Server": true, "System.GC.HeapHardLimit": 805306368, "System.GC.HighMemoryPercent": 75 } } Or as environment variables in your Container App: az containerapp update --name my-dotnet-api --resource-group my-rg --set-env-vars "DOTNET_GCConserveMemory=5" "DOTNET_GCHeapHardLimit=805306368" Measuring the Impact of Your Changes After making changes, use this Log Analytics query to track your startup times over the past 24 hours and confirm the improvements: ContainerAppConsoleLogs_CL | where ContainerAppName_s == "my-dotnet-api" | where Log_s contains "Application started" or Log_s contains "Now listening on" | project TimeGenerated, Log_s, ContainerName_s | order by TimeGenerated desc And check request duration percentiles in Application Insights: requests | where cloud_RoleName == "my-dotnet-api" | where timestamp > ago(24h) | summarize p50 = percentile(duration, 50), p90 = percentile(duration, 90), p99 = percentile(duration, 99), count = count() by bin(timestamp, 1h) | order by timestamp desc Summary: Your Performance Tuning Quick Reference Here is a quick decision guide based on what you are seeing: Symptom Most Likely Cause First Fix to Try First request after idle is very slow `minReplicas: 0` Set `minReplicas: 1` Spike period has errors, then recovers KEDA scaling too slow Lower concurrentRequests threshold New replicas start slowly Large image size Multi-stage Docker build High CPU at moderate traffic Under-allocated resources Increase CPU/memory allocation Django startup is slow Heavy Python imports Profile and defer imports .NET app slow under load Workstation GC mode Enable server GC References and Sample Resources Use these links to tune startup performance, scaling behavior, and runtime efficiency. Azure Container Apps docs (core) Scale applications in Azure Container Apps Workload profiles overview Health probes in Azure Container Apps Revisions in Azure Container Apps Monitoring and logging in Azure Container Apps Runtime and framework performance references Docker multi-stage builds .NET performance best practices for ASP.NET Core .NET runtime GC configuration Django performance optimization Uvicorn deployment guide Scaling engine references and samples KEDA concepts and documentation KEDA scaler samples Azure Samples: .NET on Azure Container Apps Azure Samples: Python on Azure Container Apps What's Next In Part 3, we go deeper into the most specialized and complex scenario in this series: troubleshooting AI workloads in Azure Container Apps. Loading large ML models, managing GPU and CPU resource constraints, and dealing with memory pressure from inference workloads all require techniques that go beyond standard web application troubleshooting. Part of the series: Troubleshooting Azure Container Apps in Production Next: Part 3 — Troubleshooting ML Model Loading, GPU Issues, and Memory Pressure in Azure Container AppsBuilding and Operating a Microsoft Foundry Hosted Agent with GitOps and GitHub Tasks
The Gap Between Prototype and Production Most AI engineering teams can build a working agent in a day. The hard part is not building it; the hard part is operating it. Prompts drift. Tool configurations change without review. Deployments happen from someone's laptop. There is no audit trail, no rollback plan, and no consistent way to promote a change from a development environment to production. GitOps closes that gap. By treating your agent definition, configuration, and infrastructure as version-controlled source code, you get the same delivery discipline that software engineering teams have applied to application code for years. Every change is reviewed, every deployment is automated, and every environment state is traceable to a specific commit. This post shows you how to apply GitOps principles to a Microsoft Foundry Hosted Agent using GitHub as the source of truth and GitHub Tasks and Actions as the automation layer. The result is a repeatable, governed, production-ready delivery model for AI agents. What Is a Microsoft Foundry Hosted Agent? Microsoft Foundry is Microsoft's platform for building, deploying, and operating AI applications and agents. A Hosted Agent is an agent runtime managed by the Foundry platform rather than self-hosted by your team. You supply the agent logic, configuration, and tools; Foundry handles the runtime lifecycle, scaling, and managed infrastructure. In practical terms, a Foundry Hosted Agent is a containerised agent application. You package your agent code, prompt definitions, tool bindings, and environment configuration into a container image. Foundry deploys and manages that container within a Foundry project, connected to models, tools, and observability infrastructure that the platform provides. Teams choose Hosted Agents over self-hosting because: The platform manages runtime infrastructure, patching, and scaling Integration with Azure AI models, managed identity, and observability is built in You can focus engineering effort on agent logic rather than cluster management Foundry projects provide environment and resource isolation without requiring you to provision and manage separate Azure resources for each environment Hosted Agents are a good fit when your team wants strong operational support with minimal platform overhead, when you need clear separation between environments, and when your agents depend on Azure AI capabilities such as Azure OpenAI Service, Azure AI Search, or Model Context Protocol integrations. Why GitOps Matters Specifically for AI Agents GitOps is straightforward for stateless web services: the code changes, the pipeline runs, the container is deployed. AI agents are more complex because there are multiple distinct artefacts that all affect agent behaviour: System prompts and instruction files Tool definitions and external integrations Model selection and configuration (temperature, max tokens, safety settings) Model Context Protocol (MCP) server definitions Orchestration logic and agent workflow code Safety and policy settings Infrastructure and deployment configuration Any one of these can change the behaviour of your agent in ways that are difficult to detect without structured review. A prompt change that looks harmless can alter tone, scope, or factual grounding. A tool configuration change can expose data to unintended callers. A model upgrade can shift response quality unpredictably. Git gives you a single place to version, review, and approve all of these artefacts together. Pull requests give you a structured review gate. Workflow automation gives you validation before anything reaches a deployed environment. Tags and releases give you deployment markers you can roll back to. The discipline of GitOps turns what is often an ad-hoc AI delivery process into a repeatable engineering practice. Reference Architecture The following diagram shows a practical reference architecture for delivering a Microsoft Foundry Hosted Agent through a GitOps model using GitHub. +---------------------------+ | GitHub Repository | | /src /agents /tools | | /prompts /infra | | /.github/workflows | +---------------------------+ | | Pull Request / Push to main v +---------------------------+ | GitHub Actions | | 1. Validate agent config | | 2. Lint and scan code | | 3. Run unit tests | | 4. Build container image | | 5. Push to registry | +---------------------------+ | | Image tag (SHA or semver) v +---------------------------+ | Azure Container Registry | | myregistry.azurecr.io | | my-agent:<sha> | +---------------------------+ | +------+------+ | | v v +----------+ +----------+ | Foundry | | Foundry | | Dev | | Test | | Project | | Project | +----------+ +----------+ | Approval gate (GitHub env) | v +----------+ | Foundry | | Prod | | Project | +----------+ | v +---------------------------+ | Observability | | Azure Monitor / App | | Insights / Foundry Logs | +---------------------------+ Key design decisions in this architecture: The GitHub repository is the single source of truth for all agent artefacts No human deploys directly to any Foundry project; all changes flow through automation Environment promotion requires a GitHub environment approval, creating a governance gate The container image is built once and promoted across environments; the image is not rebuilt per environment Secrets are stored in Azure Key Vault and accessed by the Foundry agent at runtime via managed identity Figure: GitOps delivery pipeline stages from commit to production Repository Structure A well-structured repository separates agent logic from infrastructure and tooling from prompts. The following structure works well in practice: my-foundry-agent/ ├── .github/ │ ├── workflows/ │ │ ├── validate.yml # Runs on every PR │ │ ├── build-deploy.yml # Runs on merge to main │ │ └── rollback.yml # Manual trigger workflow │ └── CODEOWNERS # Review assignments by path ├── src/ │ ├── agents/ │ │ ├── agent.py # Agent entry point and orchestration │ │ └── agent_config.json # Agent metadata and settings │ ├── tools/ │ │ ├── search_tool.py # Tool implementations │ │ └── data_tool.py │ └── prompts/ │ ├── system.txt # System prompt (versioned as plain text) │ └── instructions.txt # Supplementary instructions ├── tests/ │ ├── unit/ # Unit tests for tools and logic │ ├── integration/ # Integration tests against a running agent │ └── smoke/ # Post-deployment smoke tests ├── infra/ │ ├── main.bicep # Foundry project and resource definitions │ └── environments/ │ ├── dev.parameters.json │ ├── test.parameters.json │ └── prod.parameters.json ├── scripts/ │ ├── validate_agent.py # Config validation script │ └── smoke_test.py # Smoke test runner ├── Dockerfile # Container image definition └── docs/ └── architecture.md # Architecture and runbook documentation What belongs where and why: /src/prompts - System prompts as plain text files. Versioning prompts as files means every change goes through a pull request with a diff review, just as code does. /src/agents - Agent orchestration logic and configuration. Keeps the entry point and agent metadata co-located. /src/tools - Tool implementations separated from agent logic. Tool logic changes independently and should be reviewable in isolation. /infra - Infrastructure as code with per-environment parameter files. Environment-specific values live here, never in source files. /tests - Three layers of testing: unit tests for tools, integration tests for the full agent, and smoke tests that run against a deployed environment. /.github/workflows - All automation defined as code. There should be no manual deployment steps that live outside this directory. GitHub Tasks Across the Delivery Lifecycle GitHub Tasks and Issues provide the work tracking layer on top of the GitOps delivery model. Used well, they connect the intention behind a change to its implementation and deployment history. Practical patterns for using GitHub Tasks with agent delivery: Prompt change task - Open an issue to describe why the system prompt is changing. The pull request that changes system.txt closes that issue, creating a permanent link between the rationale and the diff. Tool integration task - When adding a new MCP server or external tool integration, create a task that captures the design decision, security review outcome, and test evidence before the pull request is merged. Model upgrade task - When upgrading the underlying model version, create a task that includes evaluation results and comparison data. The task becomes part of your change audit trail. Rollback task - If a deployment causes quality regressions, create a task to track the rollback, root cause investigation, and corrective action. Automation can open this task automatically when a deployment fails health checks. Dependency on approval - GitHub Tasks can be linked to environment approvals in GitHub Actions. A task in a specific milestone or project column can gate a promotion workflow. The key insight is that GitHub Tasks are not just work management; they are part of your audit trail. A regulatory or security reviewer can follow the chain from a production deployment back through workflow runs, pull request reviews, and the original task that described the intent of the change. End-to-End GitOps Flow The following walk-through describes a realistic developer experience for changing an agent prompt and promoting it to production. A developer opens a GitHub Issue describing the prompt change required and the expected behaviour improvement. The developer creates a feature branch, edits src/prompts/system.txt , and updates any related unit tests. A pull request is opened. The validate workflow runs immediately, checking prompt length, configuration schema, and lint rules. Unit tests run against the changed files. A code reviewer approves the pull request. The CODEOWNERS file ensures that prompt changes require review from the AI engineering team, not just any contributor. On merge to main, the build workflow runs: the container image is built with the new prompt baked in, tagged with the commit SHA, and pushed to Azure Container Registry. The deployment workflow deploys the new image to the Foundry Dev project automatically. Integration and smoke tests run against the deployed dev agent. If tests pass, the workflow pauses at the Test environment gate and requests approval from a named reviewer. After approval, the same image is deployed to Foundry Test. Smoke tests run again. A second approval gate controls promotion to Foundry Prod. If at any point a health check or smoke test fails, the rollback workflow redeploys the previous image tag from the registry. The image tag of the last known-good deployment is stored as a GitHub environment variable. This flow means that no human ever deploys directly to any environment. Every environment state is traceable to a specific commit, image tag, and workflow run. Security and Governance AI agents often have access to sensitive data and external systems. Security and governance cannot be an afterthought. Identity and Access Use managed identity for the Foundry Hosted Agent to access Azure resources. Avoid service principal secrets where Microsoft Entra Workload Identity or managed identity is available. Apply the principle of least privilege: the agent identity should have read access to data sources and limited write access only where the use case requires it. Tool integrations that require API keys or external credentials should retrieve them from Azure Key Vault at runtime, never from environment variables baked into the image. Secrets and Configuration Store secrets in Azure Key Vault. Reference them in your Foundry project configuration using Key Vault references. Store GitHub Actions secrets using repository or environment-scoped secrets. Never echo secrets in workflow logs. Separate environment configuration (endpoints, resource names, capacity settings) from agent logic. Use the /infra/environments/ parameter files for this. Auditability and Review Enforce pull request reviews for all changes to /src/prompts , /src/agents , and /infra via CODEOWNERS. Require status checks to pass before merging. Blocked merges prevent untested changes reaching production. GitHub's workflow run history gives you a complete deployment audit trail. You can answer "what was deployed to prod on Tuesday and who approved it" in seconds. For regulated environments, consider branch protection rules that require signed commits. Safe Rollout Use canary or blue-green patterns where Foundry supports them for high-traffic agents. Always keep the previous image tag available in the registry. Do not delete images on deployment. Document and test your rollback procedure before you need it in production. Observability and Operational Readiness A deployed agent that you cannot observe is an agent you cannot operate. Build observability in from the start. What to Monitor Deployment health - Track whether each Foundry deployment succeeded and the agent is responding. Wire deployment outcomes back to GitHub workflow run status. Model and tool errors - Log tool call failures, model timeout errors, and safety filter activations. Aggregate these in Azure Monitor or Application Insights. Latency - Track end-to-end response latency per agent version. A latency increase after a model or prompt change is an early signal of a quality regression. Token consumption - Monitor token usage per request and per session. Unexpected increases can indicate prompt injection or runaway orchestration loops. Traceability - Log which agent version handled each request. Correlation between the image tag and request traces is essential for debugging production issues. Debugging and Alerting Use structured logging with a consistent schema. Include fields for agent version, session ID, tool called, and outcome. Set up alerts for error rate thresholds and latency percentiles. Alert before users notice the problem. For failed agent runs, ensure logs capture the full conversation context (within your data retention policy) so that developers can reproduce and diagnose the failure. Microsoft Foundry Toolboxes One of the most important additions to the Foundry platform is Toolboxes, currently in Public Preview. If you have ever seen an agent codebase where three different agents each wire the same search tool with their own credentials and slightly different configurations, you already understand the problem Toolboxes solve. A Toolbox is a named, versioned bundle of tools managed centrally in Microsoft Foundry. You define the tools once, configure authentication and access centrally, and publish a single MCP-compatible endpoint. Any agent in any runtime consumes that endpoint without per-tool wiring, custom SDK integration, or duplicated credential management. Figure: Before and after Foundry Toolboxes. Each agent previously managed its own tool connections. With Toolboxes, agents connect to one governed endpoint. The Four Pillars Discover (coming soon) - Find approved tools without browsing long catalogues. Reduces duplication by surfacing what already exists before developers build something new. Build (available today) - Select tools into a named toolbox. Supported types include built-in tools (Web Search, Code Interpreter, File Search, Azure AI Search), MCP servers, Agent-to-Agent (A2A) endpoints, and OpenAPI-defined services. Consume (available today) - A single MCP-compatible endpoint exposes every tool in the toolbox to any agent runtime. Agents that can speak MCP can use a Foundry Toolbox without any Foundry-specific SDK dependency. Govern (coming soon) - Centralised authentication and observability applied to every tool call flowing through the toolbox. Security and platform teams get consistent controls without asking developers to bolt governance onto every agent individually. Toolboxes and GitOps: A Natural Fit Toolboxes are particularly well-suited to a GitOps delivery model because the toolbox definition is a discrete, versioned artefact. Instead of credentials and tool configuration scattered across agent codebases, the toolbox becomes its own managed entity with its own version history. The key design property is that the toolbox endpoint URL is stable. When you promote a new toolbox version to be the default, agents consuming the endpoint pick up the update without any code changes. This means you can update tool configuration, add a new MCP server, or rotate credentials in the toolbox without redeploying every agent that uses it. Figure: Toolbox versioning in a GitOps model. Commits trigger CI validation and deployment of new toolbox versions. The stable endpoint URL allows agents to consume updates without redeployment. Adding a Toolbox to Your Repository In your GitOps repository, toolbox definitions belong in /src/tools/toolbox_config.py or as a declarative configuration file checked into version control. The following example creates a toolbox that combines web search, Azure AI Search over internal documentation, and a GitHub MCP server: # src/tools/toolbox_config.py # Run this via CI to create or update a toolbox version in Foundry. from azure.identity import DefaultAzureCredential from azure.ai.projects import AIProjectClient import os client = AIProjectClient( endpoint=os.environ["FOUNDRY_PROJECT_ENDPOINT"], credential=DefaultAzureCredential() ) toolbox_version = client.beta.toolboxes.create_toolbox_version( toolbox_name="customer-feedback-toolbox", description="Tools for triaging customer feedback: search, docs, and GitHub.", tools=[ { "type": "web_search", "description": "Search approved public documentation sites.", "custom_search_configuration": { "project_connection_id": os.environ["BING_CONNECTION_NAME"], "instance_name": os.environ["BING_INSTANCE_NAME"] } }, { "type": "azure_ai_search", "name": "product-manuals-search", "description": "Search internal product documentation.", "azure_ai_search": { "indexes": [ { "index_name": os.environ["SEARCH_INDEX_NAME"], "project_connection_id": os.environ["SEARCH_CONNECTION_ID"] } ] } }, { "type": "mcp", "server_label": "github", "server_url": "https://api.githubcopilot.com/mcp", "project_connection_id": os.environ["GITHUB_CONNECTION_ID"] } ], ) print(f"Toolbox version created: {toolbox_version.version}") print(f"MCP endpoint: {toolbox_version.mcp_endpoint}") To promote a toolbox version to be the default (the endpoint agents use without specifying a version), add this to your deployment workflow: # Promote toolbox version to default after validation toolbox = client.beta.toolboxes.update( toolbox_name="customer-feedback-toolbox", default_version=toolbox_version.version, ) print(f"Default version is now: {toolbox.default_version}") The stable endpoint for agents consuming this toolbox is: https://<your-project>.services.ai.azure.com/api/projects/<project>/toolbox/customer-feedback-toolbox/mcp?api-version=v1 Attaching the Toolbox to Your Hosted Agent In your agent code, connect to the toolbox via a single MCP tool definition. The agent gains access to every tool in the toolbox without knowing their individual configurations: # src/agents/agent.py (relevant excerpt) from agent_framework import MCPStreamableHTTPTool import httpx, os toolbox_endpoint = os.environ["FOUNDRY_TOOLBOX_ENDPOINT"] http_client = httpx.AsyncClient( auth=_ToolboxAuth(token_provider), # Microsoft Entra bearer token timeout=120.0, ) mcp_tool = MCPStreamableHTTPTool( name="toolbox", url=toolbox_endpoint, http_client=http_client, load_prompts=False, ) # Agent now has access to web search, AI Search, and GitHub MCP # through one tool definition and one authenticated connection. GitOps Workflow Extension for Toolboxes Add a dedicated job to your build-deploy workflow to create and promote toolbox versions as part of the same CI/CD pipeline: deploy-toolbox: name: Deploy Toolbox Version needs: validate runs-on: ubuntu-latest environment: dev permissions: id-token: write contents: read steps: - uses: actions/checkout@v4 - name: Azure login (OIDC) uses: azure/login@v3 with: client-id: ${{ secrets.AZURE_CLIENT_ID_DEV }} tenant-id: ${{ secrets.AZURE_TENANT_ID }} subscription-id: ${{ secrets.AZURE_SUBSCRIPTION_ID }} - name: Create toolbox version in Foundry env: FOUNDRY_PROJECT_ENDPOINT: ${{ vars.FOUNDRY_PROJECT_ENDPOINT_DEV }} BING_CONNECTION_NAME: ${{ vars.BING_CONNECTION_NAME }} BING_INSTANCE_NAME: ${{ vars.BING_INSTANCE_NAME }} SEARCH_INDEX_NAME: ${{ vars.SEARCH_INDEX_NAME }} SEARCH_CONNECTION_ID: ${{ vars.SEARCH_CONNECTION_ID }} GITHUB_CONNECTION_ID: ${{ vars.GITHUB_CONNECTION_ID }} run: python src/tools/toolbox_config.py Key points to note: Toolbox configuration is Python code in source control, reviewed through pull requests like any other change Connection IDs and index names are environment variables from GitHub Actions variables, not hardcoded in the script The same script runs for dev, test, and prod with different environment variable bindings Toolbox version promotion is a separate step from agent deployment, so you can update tools independently of the agent container Because the toolbox endpoint is stable, rolling back a toolbox version does not require rolling back the agent image Common Pitfalls Teams adopting this pattern commonly make the following mistakes. Identifying them early saves significant operational pain later. Treating prompts as unmanaged text. If your system prompt lives in a portal text box rather than a versioned file, you have no history, no review process, and no rollback capability. Move prompts into source control on day one. Deploying manually from the portal. Even one manual deployment breaks the GitOps contract. Your repository no longer reflects the true state of the environment. Automate everything and remove portal deployment permissions from individuals. Mixing environment configuration into source files. Hardcoded endpoint URLs or model deployment names in agent_config.json mean your dev and prod configurations diverge at the source level. Use parameter files and environment variables resolved at deployment time. Poor separation between agent logic and tool logic. When agents and tools are tightly coupled in a single file, a tool change requires a full agent review and redeployment. Keep them separate so they can evolve independently. Not versioning your Toolbox definition. Defining a Foundry Toolbox interactively through the portal gives you no audit trail and no rollback path. The toolbox configuration script belongs in source control alongside your agent code. Skipping evaluation before promotion. Deploying a prompt change without running a structured evaluation against a representative test set is how regressions reach production. Build evaluation into the pull request workflow, not just the deployment workflow. No rollback plan. If your first rollback is unplanned and urgent, it will be slow and stressful. Test your rollback procedure in a non-production environment and document the steps. Ignoring token and cost signals. AI workloads have variable cost profiles. A change that doubles average token consumption per request may be functionally correct but economically unsustainable. Monitor consumption as a first-class signal. Example GitHub Actions Workflow The following workflow runs on pull request validation and on merge to main. It covers the core delivery lifecycle: validate, build, deploy to dev, and smoke test. # .github/workflows/build-deploy.yml name: Build and Deploy Foundry Hosted Agent on: push: branches: - main pull_request: branches: - main env: REGISTRY: myregistry.azurecr.io IMAGE_NAME: my-foundry-agent jobs: validate: name: Validate Agent Configuration runs-on: ubuntu-latest steps: - uses: actions/checkout@v4 - name: Set up Python uses: actions/setup-python@v5 with: python-version: "3.12" - name: Install dependencies run: pip install -r requirements.txt - name: Validate agent config schema run: python scripts/validate_agent.py - name: Run unit tests run: pytest tests/unit/ -v - name: Lint code run: ruff check src/ build: name: Build and Push Container Image needs: validate runs-on: ubuntu-latest if: github.ref == 'refs/heads/main' permissions: id-token: write contents: read outputs: image_tag: ${{ steps.meta.outputs.version }} steps: - uses: actions/checkout@v4 - name: Azure login (OIDC) uses: azure/login@v3 with: client-id: ${{ secrets.AZURE_CLIENT_ID }} tenant-id: ${{ secrets.AZURE_TENANT_ID }} subscription-id: ${{ secrets.AZURE_SUBSCRIPTION_ID }} - name: Log in to Azure Container Registry run: az acr login --name ${{ env.REGISTRY }} - name: Extract metadata id: meta uses: docker/metadata-action@v5 with: images: ${{ env.REGISTRY }}/${{ env.IMAGE_NAME }} tags: | type=sha,format=short - name: Build and push image uses: docker/build-push-action@v7 with: context: . push: true tags: ${{ steps.meta.outputs.tags }} deploy-dev: name: Deploy to Foundry Dev needs: build runs-on: ubuntu-latest environment: dev permissions: id-token: write contents: read steps: - uses: actions/checkout@v4 - name: Azure login (OIDC) uses: azure/login@v3 with: client-id: ${{ secrets.AZURE_CLIENT_ID_DEV }} tenant-id: ${{ secrets.AZURE_TENANT_ID }} subscription-id: ${{ secrets.AZURE_SUBSCRIPTION_ID }} - name: Deploy agent to Foundry Dev project run: | az ai foundry agent deploy \ --project ${{ vars.FOUNDRY_PROJECT_DEV }} \ --image ${{ env.REGISTRY }}/${{ env.IMAGE_NAME }}:${{ needs.build.outputs.image_tag }} \ --environment dev - name: Run smoke tests against dev run: pytest tests/smoke/ -v --base-url ${{ vars.AGENT_URL_DEV }} deploy-test: name: Deploy to Foundry Test needs: deploy-dev runs-on: ubuntu-latest environment: test permissions: id-token: write contents: read steps: - uses: actions/checkout@v4 - name: Azure login (OIDC) uses: azure/login@v3 with: client-id: ${{ secrets.AZURE_CLIENT_ID_TEST }} tenant-id: ${{ secrets.AZURE_TENANT_ID }} subscription-id: ${{ secrets.AZURE_SUBSCRIPTION_ID }} - name: Deploy agent to Foundry Test project run: | az ai foundry agent deploy \ --project ${{ vars.FOUNDRY_PROJECT_TEST }} \ --image ${{ env.REGISTRY }}/${{ env.IMAGE_NAME }}:${{ needs.build.outputs.image_tag }} \ --environment test - name: Run smoke tests against test run: pytest tests/smoke/ -v --base-url ${{ vars.AGENT_URL_TEST }} Key decisions in this workflow: Validation runs on every pull request, not just on merge. Fast feedback catches problems before review. The container image is built once and the image tag is passed forward to deployment jobs. The same artefact is promoted across environments. Authentication uses OIDC federated credentials via azure/login@v3 with id-token: write permissions. No long-lived secrets are stored in GitHub for Azure authentication. The environment: test directive in the deploy-test job triggers a GitHub environment approval gate. A named reviewer must approve before the job runs. Smoke tests run after every deployment. A failed smoke test prevents further promotion. Best Practices Checklist Use this checklist when adopting the GitOps pattern for a Microsoft Foundry Hosted Agent: All agent artefacts, including prompts, tool definitions, model configuration, and Toolbox configuration scripts, are committed to source control No manual deployments to any environment; all changes flow through GitHub Actions workflows Pull request reviews are enforced for all changes to agent logic, prompts, and infrastructure via CODEOWNERS Unit tests cover tool logic; integration tests cover end-to-end agent behaviour; smoke tests cover deployed environments Container images are built once per commit and promoted across environments; images are not rebuilt per environment Environment configuration (endpoints, resource names) lives in parameter files, never in source code Secrets are stored in Azure Key Vault and accessed via managed identity at runtime GitHub environment approval gates control promotion from dev to test to prod Foundry Toolboxes are used to centralise tool definitions, credentials, and access governance across all agents; the toolbox configuration script is version-controlled and deployed through CI/CD Toolbox versions are promoted via the update default_version API step in the deployment workflow, not manually through the portal Latency, error rate, and token consumption are monitored with alerting thresholds The rollback procedure is documented, automated, and has been tested in a non-production environment GitHub Issues are used to record the intent behind significant changes and link to the pull requests that implement them Branch protection rules prevent direct pushes to main and require status checks to pass before merge The previous image tag is retained in the registry and stored as a GitHub environment variable for rollback Conclusion A Microsoft Foundry Hosted Agent is not something you deploy once and forget. Prompts evolve, tools change, models are upgraded, and policy requirements shift. Every one of those changes has the potential to alter agent behaviour in ways that affect users, costs, and compliance posture. GitOps, implemented through GitHub and GitHub Tasks, gives you the operational discipline to manage that complexity. Source control for all artefacts. Pull request review for every change. Automated validation, build, and deployment. Environment promotion gates. A complete audit trail from task to production. These are not bureaucratic overhead; they are the foundation of reliable, trustworthy AI agent operations. The teams that operate AI agents well are the ones that treat them like production software from the start. The investment in pipeline, structure, and governance pays back every time a change goes smoothly, every time a rollback takes minutes rather than hours, and every time a security or compliance reviewer can answer their question from a pull request history rather than a support ticket. Build the discipline in early. Your future self, and your production environment, will benefit from it. References Microsoft Foundry documentation Microsoft Foundry Agent Service documentation Microsoft Foundry Toolboxes documentation Introducing Toolboxes in Foundry (Microsoft Developer Blog) GitHub Actions documentation GitHub Projects and Tasks documentation Azure Container Registry documentation Azure Key Vault documentation Microsoft Entra Managed Identities documentation OpenGitOps PrinciplesBuilding an On-Device Voice Assistant with Microsoft Foundry Local
Why on-device voice still matters Most "voice AI" tutorials assume your audio leaves the machine. You ship a WAV to Whisper-API, your transcript to GPT-4, and a synthesized response back over the wire. That works — but it also means three round trips, three per-token bills, and three places your user's voice gets logged. The new wave of small, hardware-optimised models changes the trade-off. NVIDIA's Nemotron Speech Streaming En 0.6B is a 600M-parameter streaming ASR model published into the Microsoft Foundry Local catalog. Paired with a small chat model like qwen2.5-0.5b or phi-4-mini , you can run the entire capture → transcribe → reason → respond loop in-process on a developer laptop, with no API keys and no network egress. This post walks through how the fl-nemotron sample does it, the SDK pitfalls we hit on the way, and the design decisions that made the pipeline reliable. What we're building A browser-hosted assistant served by FastAPI at http://127.0.0.1:8000 . The page captures microphone audio, posts it to /api/transcribe , then streams the chat reply back over Server-Sent Events from /api/chat . All inference runs locally through two Foundry Local models loaded into the same process. The shape of the pipeline: Microphone (browser MediaRecorder) │ WebM/Opus blob ▼ Client-side WAV encoder (16 kHz, mono, PCM-16) │ multipart/form-data ▼ FastAPI /api/transcribe │ ▼ Nemotron Speech Streaming En 0.6B (Foundry Local audio client) │ transcript text ▼ Chat LLM e.g. qwen2.5-0.5b (Foundry Local chat client) │ streamed tokens ▼ FastAPI /api/chat → SSE → browser bubble The version that bit us: foundry-local-sdk >= 1.1.0 Before any code, the single most important fact about this project: The Nemotron Speech Streaming model only appears in the Foundry Local 1.1.x catalog. Older SDKs (0.5.x / 0.6.x) cannot resolve the alias nemotron-speech-streaming-en-0.6b and fail with model not found . The module name also changed in 1.1.0 — it is now foundry_local_sdk (with the underscore- sdk suffix), not foundry_local . The pip wheel for foundry-local-core is bundled, so there is no separate MSI / winget install to worry about. Pin it explicitly: pip install --upgrade "foundry-local-sdk>=1.1.0,<2" And verify before anything else: python -c "import importlib.metadata as m; print('sdk', m.version('foundry-local-sdk'))" # expect: sdk 1.1.0 Loading both models from one manager The 1.1.x SDK exposes a single FoundryLocalManager that owns the runtime. Each loaded model gives you back a per-model OpenAI-compatible client — get_chat_client() for text models and get_audio_client() for ASR. There is no need to bring your own openai Python package; the SDK ships its own thin client. The wrapper used in the repo ( src/foundry_client.py ) does this: from foundry_local_sdk import Configuration, FoundryLocalManager FoundryLocalManager.initialize(Configuration(app_name="fl-nemotron")) manager = FoundryLocalManager.instance chat_model = manager.load_model("qwen2.5-0.5b") stt_model = manager.load_model("nemotron-speech-streaming-en-0.6b") chat_client = chat_model.get_chat_client() audio_client = stt_model.get_audio_client() Both models are downloaded on first use into the Foundry Local cache and stay resident for the lifetime of the process. On a laptop with 16 GB RAM, the combined working set sits comfortably under 4 GB. The transcription surprise The first naive approach was the obvious one: with open(wav_path, "rb") as f: result = audio_client.transcribe(file=f, model="nemotron-speech-streaming-en-0.6b") That call fails on Nemotron. The bundled ONNX Runtime GenAI in foundry-local-core does not register the nemotron_speech multi-modal model type that the standard AudioClient.transcribe() path tries to instantiate. The error surfaces as a cryptic model-type registration failure deep inside the native runtime. The fix is to use the streaming session API instead — a different native entry point ( core_interop.start_audio_stream ) that the streaming model does support. The repo isolates this in src/_nemotron_live.py : def transcribe_wav_live(audio_client, wav_path, *, language="en"): with wave.open(str(wav_path), "rb") as w: sample_rate = w.getframerate() channels = w.getnchannels() sample_width = w.getsampwidth() pcm = w.readframes(w.getnframes()) session = audio_client.create_live_transcription_session() session.settings.sample_rate = sample_rate session.settings.channels = channels session.settings.bits_per_sample = sample_width * 8 session.settings.language = language session.start() # Feed PCM in ~100 ms chunks from a worker thread, then stop. bytes_per_sec = sample_rate * channels * sample_width chunk_bytes = max(bytes_per_sec // 10, 1024) def _pusher(): try: for offset in range(0, len(pcm), chunk_bytes): session.append(pcm[offset:offset + chunk_bytes]) finally: session.stop() threading.Thread(target=_pusher, daemon=True).start() parts = [] for resp in session.get_stream(): for cp in getattr(resp, "content", []) or []: text = getattr(cp, "text", "") or getattr(cp, "transcript", "") or "" if text: parts.append(text) return " ".join(p.strip() for p in parts if p.strip()).strip() Two things to notice: Push from a thread, read from the main coroutine. session.append() is a blocking write into the native stream and session.get_stream() is a blocking generator. Run one in a worker thread so the other can drain in parallel — otherwise you deadlock the session. Chunk to ~100 ms. Smaller chunks (e.g. 10 ms) spend more time crossing the FFI boundary than transcribing; larger chunks (e.g. 1 s) hold back partial results and hurt perceived latency. Always session.stop() . Without it the generator never terminates and the request hangs. The other transcription surprise: browsers don't send WAV Inside the browser, MediaRecorder defaults to audio/webm; codecs=opus . That's great for size but bad for our STT model, which expects a 16-bit mono PCM WAV at a known sample rate. Decoding WebM/Opus server-side would require ffmpeg as a runtime dependency — which is exactly the kind of friction this project exists to remove. The cleaner solution is to encode WAV on the client. AudioContext.decodeAudioData already understands WebM/Opus, so the page can decode the recording, resample to 16 kHz, mix to mono, and emit a PCM-16 WAV blob in 30 lines of JavaScript: // Inside src/static/index.html async function webmToWav(blob) { const ctx = new (window.AudioContext || window.webkitAudioContext)({ sampleRate: 16000 }); const buf = await ctx.decodeAudioData(await blob.arrayBuffer()); // Mix to mono const ch = buf.numberOfChannels; const mono = new Float32Array(buf.length); for (let c = 0; c < ch; c++) { const data = buf.getChannelData(c); for (let i = 0; i < data.length; i++) mono[i] += data[i] / ch; } return encodeWav(mono, 16000); } function encodeWav(samples, sampleRate) { const buffer = new ArrayBuffer(44 + samples.length * 2); const view = new DataView(buffer); // RIFF header writeStr(view, 0, "RIFF"); view.setUint32(4, 36 + samples.length * 2, true); writeStr(view, 8, "WAVE"); // fmt chunk writeStr(view, 12, "fmt "); view.setUint32(16, 16, true); // PCM chunk size view.setUint16(20, 1, true); // PCM format view.setUint16(22, 1, true); // mono view.setUint32(24, sampleRate, true); view.setUint32(28, sampleRate * 2, true); // byte rate view.setUint16(32, 2, true); // block align view.setUint16(34, 16, true); // bits per sample // data chunk writeStr(view, 36, "data"); view.setUint32(40, samples.length * 2, true); // PCM-16 samples let o = 44; for (let i = 0; i < samples.length; i++, o += 2) { const s = Math.max(-1, Math.min(1, samples[i])); view.setInt16(o, s < 0 ? s * 0x8000 : s * 0x7FFF, true); } return new Blob([view], { type: "audio/wav" }); } Now the server's /api/transcribe endpoint just writes the bytes to a temp file and hands them to transcribe_wav_live() — no audio decoding libraries on the Python side. Wiring it into FastAPI The server ( src/app.py ) is deliberately small. The notable detail is that the same process holds both Foundry Local model handles for its entire lifetime, so there is no warm-up cost per request: @app.post("/api/transcribe") async def transcribe(audio: UploadFile = File(...)): data = await audio.read() with tempfile.NamedTemporaryFile(suffix=".wav", delete=False) as f: f.write(data); path = f.name text = _ai_client.transcribe(path) return {"text": text} @app.post("/api/chat") async def chat(req: ChatRequest): if req.stream: return StreamingResponse( _sse(_ai_client.stream_completion(req.messages)), media_type="text/event-stream", ) return {"text": _ai_client.chat_completion(req.messages)} Streaming uses Server-Sent Events because they are trivially supported in both fetch() and the FastAPI runtime, and they don't require a WebSocket upgrade through any proxy a developer might have in front of localhost . What it looks like The repo includes screenshots of the running UI: a welcome screen with both models loaded, a streamed haiku reply, an inline code block with copy-to-clipboard, and the recording state for the microphone. Performance, honestly This is a small-model, CPU-friendly stack. On an Arm64 Surface running the x64 SDK under emulation: First model load (cold cache): tens of seconds — downloads ~600 MB for Nemotron and ~400 MB for qwen2.5-0.5b . Subsequent loads (warm cache): a few seconds per model. End-to-end transcription of a 5-second utterance: well under a second after warm-up. First chat token from qwen2.5-0.5b : typically 200–500 ms; full short reply within 1–2 s. On x64 silicon with a recent CPU the numbers improve substantially, and the SDK will pick the best execution provider it finds (CPU / DirectML / CUDA) for each model. Trade-offs to know about Model quality. qwen2.5-0.5b is a 500M-parameter model. It is fast and small enough to ship on a laptop, but it is not GPT-4. Swap in phi-4-mini or mistral-nemo-12b-instruct if you have the RAM and want better reasoning — the wrapper accepts any chat alias in the Foundry Local catalog. STT is English-only here. The current Nemotron streaming model in the catalog is ...-en-0.6b . Multilingual variants are likely to follow. Browser microphone needs a real browser. Headless / automated browsers (Playwright, Puppeteer) deny getUserMedia by default. Open the page in Edge / Chrome / Firefox to grant the permission and capture audio for real. No agent framework yet. This sample is deliberately a single-turn loop over a chat client — there is no tool calling, planning, or multi-agent orchestration. Adding the Microsoft Agent Framework on top would be a natural next step for richer behaviour. Responsible AI considerations Running locally removes the cloud-egress class of privacy concerns, but it does not remove responsibility: Disclose recording. The browser prompts for mic permission; your UI should make it obvious when capture is active. The sample shows a red ⏹ button and a "Recording…" banner for that reason. Don't log raw audio. The sample writes audio to a per-request NamedTemporaryFile and deletes it after transcription. Treat the WAV as sensitive data even when it never leaves the device. Small models hallucinate. A 0.5B chat model is great for snappy local replies, but unsuitable for high-stakes answers. Pair it with retrieval, ground it on your own data, or escalate to a larger model when accuracy matters. Try it Clone github.com/leestott/fl-nemotron. ./setup.ps1 (or ./setup.sh ) to create a virtualenv and install the pinned SDK. python scripts/prefetch.py nemotron-speech-streaming-en-0.6b qwen2.5-0.5b to download both models. .venv\Scripts\uvicorn.exe app:app --app-dir src --port 8000 Open http://127.0.0.1:8000 in a real browser and click the 🎤 button. Where to go next Foundry Local documentation — official docs for the runtime, catalog, and SDK. microsoft/Foundry-Local — upstream samples and issue tracker. NVIDIA Nemotron model family — background on the speech and language models being published into the catalog. leestott/fl-nemotron — the full source for this post. Key takeaways Pin foundry-local-sdk >= 1.1.0 . Earlier SDKs cannot see the Nemotron Speech Streaming model. Use the LiveAudioTranscriptionSession API for Nemotron, not AudioClient.transcribe() . Encode WAV in the browser. It eliminates a heavy server-side ffmpeg dependency for a few lines of JS. Push audio chunks on a worker thread and drain the response generator on the main one to avoid deadlocks. A small Foundry Local chat model plus Nemotron STT gives you a credible local voice loop in a single Python process — no cloud, no keys, no data egress.How to Visualize Your Azure AI Workloads Usage for Observability
This article assumes you already have an Azure Foundry project and resource deployed in Microsoft Foundry. The options referenced here are documented in detail in the linked articles; this post serves as a consolidated step by step guide bringing them all together and explaining where each option is most useful. A Summary: Need Best Option Quick day-over-day visual, minimal setup Grafana Dashboard (Option 3) Custom growth % calculations App Insights + KQL in Log Analytics (Option 4) Shareable, interactive report Azure Workbooks (Option 5) Per-user/per-agent granularity APIM + App Insights (Option 6) Quick one-off chart, export to Excel Microsoft Foundry Monitor tab or App Insights Metrics Explorer (Option 1 and 2) Option 1. Within the Microsoft Foundry Portal (Quickest, No Setup) If you have models deployed in Microsoft Foundry and would like to monitor its usage, go to the New Foundry Portal → Build → Models → Monitor tab. View metrics such as: Estimated cost Total token usage Input vs. output tokens Number of requests This is the simplest way to monitor both model and agent usage. For PAYG plans: You can also view your total allocated quota (and figure out which Tier you are on) using the Quota Management Screen (New Foundry Portal → Operate → Quota tab). This screen shows how much your total allocated quota is, per model in a given subscription + region + Deployment Type (Global, Data Zones or Regional). For eg., in the image below, for gpt-4o, I am allocated 7M total TPM in my subscription. I am only using 150K TPM of the allocated 7M TPM amount. Which means, my requests will get throttled if I exceed the 150K TPM limit. To avoid throttling, I would need to increase my shared allocation limit. NOTE: you are charged for usage, so if you allow more capacity, you use more, so you pay more. Option 2: Azure Monitor Metrics Explorer This is already built into the Azure Portal and gives you time-series charts out of the box. Go to Azure Portal → your Azure OpenAI / Foundry resource → Monitoring → Metrics Select a metric like AzureOpenAIRequests or TokenTransaction Set Aggregation to Sum (total) or Max and Time granularity to 1 day Split by ModelDeploymentName to see per-model trends Adjust the time range (e.g., last 30 days) — you'll see day-over-day bars/lines Tip: You can pin these charts to an Azure Dashboard for a persistent view, or click Share → Download to Excel to get the raw data for your own analysis. Option 3: Azure Managed Grafana (Best Pre-Built Dashboard) This is the best option for a polished, real-time, day-over-day dashboard with no custom code. There's a pre-built AI Foundry dashboard ready to import. [grafana.com], [Create a M...ed Grafana] How to set it up: Create an Azure Managed Grafana workspace (if you don't have one) In Grafana, go to Dashboards → New → Import → enter dashboard ID 24039 (for Foundry) Select your Azure Monitor data source and point it to your Foundry resource Tip: You can also import this directly from the Azure Portal: Monitor → Dashboards with Grafana → AI Foundry. That's it — the dashboard gives you (per model deployment): Token trends over time (inference, prompt, completion — day over day) Request trends over time (AzureOpenAIRequests as a time series) Latency trends (bonus) NOTE: Default time range is 7 days — adjust to 30/60/90 days for growth trends Option 4: Application Insights + KQL Queries (Most Flexible, Custom Reports) If you want fully custom day-over-day growth calculations (e.g., % change day-to-day), this is the way. [azurefeeds.com] Setup: Ensure your Foundry project is connected to an Application Insights resource (Foundry → Settings → Connected Resources). Open up App Insights resource → Logs → New Query or choose a sample query. In the images below, we simply ran 'requests' and set the time range to 24 hours. There is also a Kusto Query Language (KQL) mode or Simple mode on the right-hand side: Simple mode will let you run out of the box samples. KQL mode will open up a query window for you to enter custom queries. Below are the results in grid view. Same view but showing a chart: Export options: Another way to get the above graphs are via Log Analytics. Simply enable Diagnostic Settings on your Azure OpenAI resource → send to a Log Analytics workspace. Open Log Analytics → Logs and try our your sample queries. Sample KQL for day-over-day token usage (adjust to your needs): AzureMetrics | where MetricName in ("TokenTransaction", "ProcessedPromptTokens", "GeneratedTokens") | where TimeGenerated > ago(30d) | summarize DailyTokens = sum(Total) by bin(TimeGenerated, 1d), MetricName | order by TimeGenerated asc | render timechart Result: Sample KQL for day-over-day growth % (adjust to your needs): AzureMetrics | where MetricName == "TokenTransaction" | where TimeGenerated > ago(30d) | summarize DailyTokens = sum(Total) by Day = bin(TimeGenerated, 1d) | sort by Day asc | extend PrevDay = prev(DailyTokens) | extend GrowthPct = round((DailyTokens - PrevDay) / PrevDay * 100, 2) | project Day, DailyTokens, GrowthPct Option 5: Azure Monitor Workbooks (Custom Dashboards, Shareable) Workbooks let you build interactive, parameterized dashboards that combine metrics and KQL logs. What's more, you can select resources from multiple subscriptions and visualize them all in one place using Workbooks! Go to Azure Portal → Monitor → Workbooks → New Add a Metrics query panel → select your Log Analytics or App Insights or Foundry resource -> Enter the same query you used in Option 4. Do a test run and view the graphs (this can be viewed as charts or a list (grid view)): 4. Save and share with your team. Option 6: APIM + Application Insights (Granular Per-Caller/Per-Agent Tracking) 1. If your app routes requests through Azure API Management, you can use the azure-openai-emit-token-metric policy to send per-request token metrics to Application Insights with custom dimensions (User ID, Subscription ID, Agent, etc.). [Azure API...osoft Docs] This is ideal for scenarios like: "Which agent consumed the most tokens last week?" "What's the token usage per API consumer/team?" NOTE: Microsoft Foundry resources do not track usage by users. So, fronting your Foundry resource with an APIM could be a way to track users provided you pass the username/id in the request context. How you implement this is upto your app design. Ref: AI-Gateway/labs/token-metrics-emitting/token-metrics-emitting.ipynb at main · Azure-Samples/AI-Gateway · GitHub Bonus: Check out all other APIM + AI related policies here: AI-Gateway/labs/semantic-caching at main · Azure-Samples/AI-Gateway AI-Gateway/labs/token-rate-limiting at main · Azure-Samples/AI-Gateway AI-Gateway/labs/token-metrics-emitting/token-metrics-emitting.ipynb at main · Azure-Samples/AI-Gateway · GitHubStop Experimenting, Start Building: AI Apps & Agents Dev Days Has You Covered
The AI landscape has shifted. The question is no longer “Can we build AI applications?” it’s “Can we build AI applications that actually work in production?” Demos are easy. Reliable, scalable, resilient AI systems that handle real-world complexity? That’s where most teams struggle. If you’re an AI developer, software engineer, or solution architect who’s ready to move beyond prototypes and into production-grade AI, there’s a series built specifically for you. What Is AI Apps & Agents Dev Days? AI Apps & Agents Dev Days is a monthly technical series from Microsoft Reactor, delivered in partnership with Microsoft and NVIDIA. You can explore the full series at https://developer.microsoft.com/en-us/reactor/series/s-1590/ This isn’t a slide deck marathon. The series tagline says it best: “It’s not about slides, it’s about building.” Each session tackles real-world challenges, shares patterns that actually work, and digs into what’s next in AI-driven app and agent design. You bring your curiosity, your code, and your questions. You leave with something you can ship. The sessions are led by experienced engineers and advocates from both Microsoft and NVIDIA, people like Pamela Fox, Bruno Capuano, Anthony Shaw, Gwyneth Peña-Siguenza, and solutions architects from NVIDIA’s Cloud AI team. These aren’t theorists; they’re practitioners who build and ship the tools you use every day. What You’ll Learn The series covers the full spectrum of building AI applications and agent-based systems. Here are the key themes: Building AI Applications with Azure, GitHub, and Modern Tooling Sessions walk through how to wire up AI capabilities using Azure services, GitHub workflows, and the latest SDKs. The focus is always on code-first learning, you’ll see real implementations, not abstract architecture diagrams. Designing and Orchestrating AI Agents Agent development is one of the series’ strongest threads. Sessions cover how to build agents that orchestrate long-running workflows, persist state automatically, recover from failures, and pause for human-in-the-loop input, without losing progress. For example, the session “AI Agents That Don’t Break Under Pressure” demonstrates building durable, production-ready AI agents using the Microsoft Agent Framework, running on Azure Container Apps with NVIDIA serverless GPUs. Scaling LLM Inference and Deploying to Production Moving from a working prototype to a production deployment means grappling with inference performance, GPU infrastructure, and cost management. The series covers how to leverage NVIDIA GPU infrastructure alongside Azure services to scale inference effectively, including patterns for serverless GPU compute. Real-World Architecture Patterns Expect sessions on container-based deployments, distributed agent systems, and enterprise-grade architectures. You’ll learn how to use services like Azure Container Apps to host resilient AI workloads, how Foundry IQ fits into agent architectures as a trusted knowledge source, and how to make architectural decisions that balance performance, cost, and scalability. Why This Matters for Your Day Job There’s a critical gap between what most AI tutorials teach and what production systems actually require. This series bridges that gap: Production-ready patterns, not demos. Every session focuses on code and architecture you can take directly into your projects. You’ll learn patterns for state persistence, failure recovery, and durable execution — the things that break at 2 AM. Enterprise applicability. The scenarios covered — travel planning agents, multi-step workflows, GPU-accelerated inference — map directly to enterprise use cases. Whether you’re building internal tooling or customer-facing AI features, the patterns transfer. Honest trade-off discussions. The speakers don’t shy away from the hard questions: When do you need serverless GPUs versus dedicated compute? How do you handle agent failures gracefully? What does it actually cost to run these systems at scale? Watch On-Demand, Build at Your Own Pace Every session is available on-demand. You can watch, pause, and build along at your own pace, no need to rearrange your schedule. The full playlist is available at This is particularly valuable for technical content. Pause a session while you replicate the architecture in your own environment. Rewind when you need to catch a configuration detail. Build alongside the presenters rather than just watching passively. What You’ll Walk Away Wit After working through the series, you’ll have: Practical agent development skills — how to design, orchestrate, and deploy AI agents that handle real-world complexity, including state management, failure recovery, and human-in-the-loop patterns Production architecture patterns — battle-tested approaches for deploying AI workloads on Azure Container Apps, leveraging NVIDIA GPU infrastructure, and building resilient distributed systems Infrastructure decision-making confidence — a clearer understanding of when to use serverless GPUs, how to optimise inference costs, and how to choose the right compute strategy for your workload Working code and reference implementations — the sessions are built around live coding and sample applications (like the Travel Planner agent demo), giving you starting points you can adapt immediately A framework for continuous learning — with new sessions each month, you’ll stay current as the AI platform evolves and new capabilities emerge Start Building The AI applications that will matter most aren’t the ones with the flashiest demos — they’re the ones that work reliably, scale gracefully, and solve real problems. That’s exactly what this series helps you build. Whether you’re designing your first AI agent system or hardening an existing one for production, the AI Apps & Agents Dev Days sessions give you the patterns, tools, and practical knowledge to move forward with confidence. Explore the series at https://developer.microsoft.com/en-us/reactor/series/s-1590/ and start watching the on-demand sessions at the link above. The best time to level up your AI engineering skills was yesterday. The second-best time is right now and these sessions make it easy to start.Build a Fully Offline AI App with Foundry Local and CAG
A hands-on guide to building an on-device AI support agent using Context-Augmented Generation, JavaScript, and Foundry Local. You have probably heard the AI pitch: "just call our API." But what happens when your application needs to work without an internet connection? Perhaps your users are field engineers standing next to a pipeline in the middle of nowhere, or your organisation has strict data privacy requirements, or you simply want to build something that works without a cloud bill. This post walks you through how to build a fully offline, on-device AI application using Foundry Local and a pattern called Context-Augmented Generation (CAG). By the end, you will have a clear understanding of what CAG is, how it compares to RAG, and the practical steps to build your own solution. The finished application: a browser-based AI support agent that runs entirely on your machine. What Is Context-Augmented Generation? Context-Augmented Generation (CAG) is a pattern for making AI models useful with your own domain-specific content. Instead of hoping the model "knows" the answer from its training data, you pre-load your entire knowledge base into the model's context window at startup. Every query the model handles has access to all of your documents, all of the time. The flow is straightforward: Load your documents into memory when the application starts. Inject the most relevant documents into the prompt alongside the user's question. Generate a response grounded in your content. There is no retrieval pipeline, no vector database, and no embedding model. Your documents are read from disc, held in memory, and selected per query using simple keyword scoring. The model generates answers grounded in your content rather than relying on what it learnt during training. CAG vs RAG: Understanding the Trade-offs If you have explored AI application patterns before, you have likely encountered Retrieval-Augmented Generation (RAG). Both CAG and RAG solve the same core problem: grounding an AI model's answers in your own content. They take different approaches, and each has genuine strengths and limitations. CAG (Context-Augmented Generation) How it works: All documents are loaded at startup. The most relevant ones are selected per query using keyword scoring and injected into the prompt. Strengths: Drastically simpler architecture with no vector database, no embeddings, and no retrieval pipeline Works fully offline with no external services Minimal dependencies (just two npm packages in this sample) Near-instant document selection with no embedding latency Easy to set up, debug, and reason about Limitations: Constrained by the model's context window size Best suited to small, curated document sets (tens of documents, not thousands) Keyword scoring is less precise than semantic similarity for ambiguous queries Adding documents requires an application restart RAG (Retrieval-Augmented Generation) How it works: Documents are chunked, embedded into vectors, and stored in a database. At query time, the most semantically similar chunks are retrieved and injected into the prompt. Strengths: Scales to thousands or millions of documents Semantic search finds relevant content even when the user's wording differs from the source material Documents can be added or updated dynamically without restarting Fine-grained retrieval (chunk-level) can be more token-efficient for large collections Limitations: More complex architecture: requires an embedding model, a vector database, and a chunking strategy Retrieval quality depends heavily on chunking, embedding model choice, and tuning Additional latency from the embedding and search steps More dependencies and infrastructure to manage Want to compare these patterns hands-on? There is a RAG-based implementation of the same gas field scenario using vector search and embeddings. Clone both repositories, run them side by side, and see how the architectures differ in practice. When Should You Choose Which? Consideration Choose CAG Choose RAG Document count Tens of documents Hundreds or thousands Offline requirement Essential Optional (can run locally too) Setup complexity Minimal Moderate to high Document updates Infrequent (restart to reload) Frequent or dynamic Query precision Good for keyword-matchable content Better for semantically diverse queries Infrastructure None beyond the runtime Vector database, embedding model For the sample application in this post (20 gas engineering procedure documents on a local machine), CAG is the clear winner. If your use case grows to hundreds of documents or requires real-time ingestion, RAG becomes the better choice. Both patterns can run offline using Foundry Local. Foundry Local: Your On-Device AI Runtime Foundry Local is a lightweight runtime from Microsoft that downloads, manages, and serves language models entirely on your device. No cloud account, no API keys, no outbound network calls (after the initial model download). In this sample, your application is responsible for deciding which model to use, and it does that through the foundry-local-sdk . The app creates a FoundryLocalManager , asks the SDK for the local model catalogue, and then runs a small selection policy from src/modelSelector.js . That policy looks at the machine's available RAM, filters out models that are too large, ranks the remaining chat models by preference, and then returns the best fit for that device. Why does it work this way? Because shipping one fixed model would either exclude lower-spec machines or underuse more capable ones. A 14B model may be perfectly reasonable on a 32 GB workstation, but the same choice would be slow or unusable on an 8 GB laptop. By selecting at runtime, the same codebase can run across a wider range of developer machines without manual tuning. What makes it particularly useful for developers: No GPU required — runs on CPU or NPU, making it accessible on standard laptops and desktops Native SDK bindings — in-process inference via the foundry-local-sdk npm package, with no HTTP round-trips to a local server Automatic model management — downloads, caches, and loads models automatically Dynamic model selection — the SDK can evaluate your device's available RAM and pick the best model from the catalogue Real-time progress callbacks — ideal for building loading UIs that show download and initialisation progress The integration code is refreshingly minimal. Here is the core pattern: import { FoundryLocalManager } from "foundry-local-sdk"; // Create a manager and get the model catalogue const manager = FoundryLocalManager.create({ appName: "my-app" }); // Auto-select the best model for this device based on available RAM const models = await manager.catalog.getModels(); const model = selectBestModel(models); // Download if not cached, then load into memory if (!model.isCached) { await model.download((progress) => { console.log(`Download: ${progress.toFixed(0)}%`); }); } await model.load(); // Create a chat client for direct in-process inference const chatClient = model.createChatClient(); const response = await chatClient.completeChat([ { role: "system", content: "You are a helpful assistant." }, { role: "user", content: "How do I detect a gas leak?" } ]); That is it. No server configuration, no authentication tokens, no cloud provisioning. The model runs in the same process as your application. The download step matters for a simple reason: offline inference only works once the model files exist locally. The SDK checks whether the chosen model is already cached on the machine. If it is not, the application asks Foundry Local to download it once, store it locally, and then load it into memory. After that first run, the cached model can be reused, which is why subsequent launches are much faster and can operate without any network dependency. Put another way, there are two cooperating pieces here. Your application chooses which model is appropriate for the device and the scenario. Foundry Local and its SDK handle the mechanics of making that model available locally, caching it, loading it, and exposing a chat client for inference. That separation keeps the application logic clear whilst letting the runtime handle the heavy lifting. The Technology Stack The sample application is deliberately simple. No frameworks, no build steps, no Docker: Layer Technology Purpose AI Model Foundry Local + auto-selected model Runs locally via native SDK bindings; best model chosen for your device Back end Node.js + Express Lightweight HTTP server, everyone knows it Context Markdown files pre-loaded at startup No vector database, no embeddings, no retrieval step Front end Single HTML file with inline CSS No build step, mobile-responsive, field-ready The total dependency footprint is two npm packages: express and foundry-local-sdk . Architecture Overview The four-layer architecture, all running on a single machine. The system has four layers, all running in a single process on your device: Client layer: a single HTML file served by Express, with quick-action buttons and a responsive chat interface Server layer: Express.js starts immediately and serves the UI plus an SSE status endpoint; API routes handle chat (streaming and non-streaming), context listing, and health checks CAG engine: loads all domain documents at startup, selects the most relevant ones per query using keyword scoring, and injects them into the prompt AI layer: Foundry Local runs the auto-selected model on CPU/NPU via native SDK bindings (in-process inference, no HTTP round-trips) Building the Solution Step by Step Prerequisites You need two things installed on your machine: Node.js 20 or later: download from nodejs.org Foundry Local: Microsoft's on-device AI runtime: winget install Microsoft.FoundryLocal Foundry Local will automatically select and download the best model for your device the first time you run the application. You can override this by setting the FOUNDRY_MODEL environment variable to a specific model alias. Getting the Code Running # Clone the repository git clone https://github.com/leestott/local-cag.git cd local-cag # Install dependencies npm install # Start the server npm start Open http://127.0.0.1:3000 in your browser. You will see a loading overlay with a progress bar whilst the model downloads (first run only) and loads into memory. Once the model is ready, the overlay fades away and you can start chatting. Desktop view Mobile view How the CAG Pipeline Works Let us trace what happens when a user asks: "How do I detect a gas leak?" The query flow from browser to model and back. 1 Server starts and loads documents When you run npm start , the Express server starts on port 3000. All .md files in the docs/ folder are read, parsed (with optional YAML front-matter for title, category, and ID), and grouped by category. A document index is built listing all available topics. 2 Model is selected and loaded The model selector evaluates your system's available RAM and picks the best model from the Foundry Local catalogue. If the model is not already cached, it downloads it (with progress streamed to the browser via SSE). The model is then loaded into memory for in-process inference. 3 User sends a question The question arrives at the Express server. The chat engine selects the top 3 most relevant documents using keyword scoring. 4 Prompt is constructed The engine builds a messages array containing: the system prompt (with safety-first instructions), the document index (so the model knows all available topics), the 3 selected documents (approximately 6,000 characters), the conversation history, and the user's question. 5 Model generates a grounded response The prompt is sent to the locally loaded model via the Foundry Local SDK's native bindings. The response streams back token by token through Server-Sent Events to the browser. A response with safety warnings and step-by-step guidance The sources panel shows which documents were used Key Code Walkthrough Loading Documents (the Context Module) The context module reads all markdown files from the docs/ folder at startup. Each document can have optional YAML front-matter for metadata: // src/context.js export function loadDocuments() { const files = fs.readdirSync(config.docsDir) .filter(f => f.endsWith(".md")) .sort(); const docs = []; for (const file of files) { const raw = fs.readFileSync(path.join(config.docsDir, file), "utf-8"); const { meta, body } = parseFrontMatter(raw); docs.push({ id: meta.id || path.basename(file, ".md"), title: meta.title || file, category: meta.category || "General", content: body.trim(), }); } return docs; } There is no chunking, no vector computation, and no database. The documents are held in memory as plain text. Dynamic Model Selection Rather than hard-coding a model, the application evaluates your system at runtime: // src/modelSelector.js const totalRamMb = os.totalmem() / (1024 * 1024); const budgetMb = totalRamMb * 0.6; // Use up to 60% of system RAM // Filter to models that fit, rank by quality, boost cached models const candidates = allModels.filter(m => m.task === "chat-completion" && m.fileSizeMb <= budgetMb ); // Returns the best model: e.g. phi-4 on a 32 GB machine, // or phi-3.5-mini on a laptop with 8 GB RAM This means the same application runs on a powerful workstation (selecting a 14B parameter model) or a constrained laptop (selecting a 3.8B model), with no code changes required. This is worth calling out because it is one of the most practical parts of the sample. Developers do not have to decide up front which single model every user should run. The application makes that decision at startup based on the hardware budget you set, then asks Foundry Local to fetch the model if it is missing. The result is a smoother first-run experience and fewer support headaches when the same app is used on mixed hardware. The System Prompt For safety-critical domains, the system prompt is engineered to prioritise safety, prevent hallucination, and enforce structured responses: // src/prompts.js export const SYSTEM_PROMPT = `You are a local, offline support agent for gas field inspection and maintenance engineers. Behaviour Rules: - Always prioritise safety. If a procedure involves risk, explicitly call it out. - Do not hallucinate procedures, measurements, or tolerances. - If the answer is not in the provided context, say: "This information is not available in the local knowledge base." Response Format: - Summary (1-2 lines) - Safety Warnings (if applicable) - Step-by-step Guidance - Reference (document name + section)`; This pattern is transferable to any safety-critical domain: medical devices, electrical work, aviation maintenance, or chemical handling. Adapting This for Your Own Domain The sample project is designed to be forked and adapted. Here is how to make it yours in three steps: 1. Replace the documents Delete the gas engineering documents in docs/ and add your own markdown files. The context module handles any markdown content with optional YAML front-matter: --- title: Troubleshooting Widget Errors category: Support id: KB-001 --- # Troubleshooting Widget Errors ...your content here... 2. Edit the system prompt Open src/prompts.js and rewrite the system prompt for your domain. Keep the structure (summary, safety, steps, reference) and update the language to match your users' expectations. 3. Override the model (optional) By default the application auto-selects the best model. To force a specific model: # See available models foundry model list # Force a smaller, faster model FOUNDRY_MODEL=phi-3.5-mini npm start # Or a larger, higher-quality model FOUNDRY_MODEL=phi-4 npm start Smaller models give faster responses on constrained devices. Larger models give better quality. The auto-selector picks the largest model that fits within 60% of your system RAM. Building a Field-Ready UI The front end is a single HTML file with inline CSS. No React, no build tooling, no bundler. This keeps the project accessible to beginners and easy to deploy. Design decisions that matter for field use: Dark, high-contrast theme with 18px base font size for readability in bright sunlight Large touch targets (minimum 48px) for operation with gloves or PPE Quick-action buttons for common questions, so engineers do not need to type on a phone Responsive layout that works from 320px to 1920px+ screen widths Streaming responses via SSE, so the user sees tokens arriving in real time The mobile chat experience, optimised for field use. Visual Startup Progress with SSE A standout feature of this application is the loading experience. When the user opens the browser, they see a progress overlay showing exactly what the application is doing: Loading domain documents Initialising the Foundry Local SDK Selecting the best model for the device Downloading the model (with a percentage progress bar, first run only) Loading the model into memory This works because the Express server starts before the model finishes loading. The browser connects immediately and receives real-time status updates via Server-Sent Events. Chat endpoints return 503 whilst the model is loading, so the UI cannot send queries prematurely. // Server-side: broadcast status to all connected browsers function broadcastStatus(state) { initState = state; const payload = `data: ${JSON.stringify(state)}\n\n`; for (const client of statusClients) { client.write(payload); } } // During initialisation: broadcastStatus({ stage: "downloading", message: "Downloading phi-4...", progress: 42 }); This pattern is worth adopting in any application where model loading takes more than a few seconds. Users should never stare at a blank screen wondering whether something is broken. Testing The project includes unit tests using the built-in Node.js test runner, with no extra test framework needed: # Run all tests npm test Tests cover configuration, server endpoints, and document loading. Use them as a starting point when you adapt the project for your own domain. Ideas for Extending the Project Once you have the basics running, there are plenty of directions to explore: Conversation memory: persist chat history across sessions using local storage or a lightweight database Hybrid CAG + RAG: add a vector retrieval step for larger document collections that exceed the context window Multi-modal support: add image-based queries (photographing a fault code, for example) PWA packaging: make it installable as a standalone offline application on mobile devices Custom model fine-tuning: fine-tune a model on your domain data for even better answers Ready to Build Your Own? Clone the CAG sample, swap in your own documents, and have an offline AI agent running in minutes. Or compare it with the RAG approach to see which pattern suits your use case best. Get the CAG Sample Get the RAG Sample Summary Building a local AI application does not require a PhD in machine learning or a cloud budget. With Foundry Local, Node.js, and a set of domain documents, you can create a fully offline, mobile-responsive AI agent that answers questions grounded in your own content. The key takeaways: CAG is ideal for small, curated document sets where simplicity and offline capability matter most. No vector database, no embeddings, no retrieval pipeline. RAG scales further when you have hundreds or thousands of documents, or need semantic search for ambiguous queries. See the local-rag sample to compare. Foundry Local makes on-device AI accessible: native SDK bindings, in-process inference, automatic model selection, and no GPU required. The architecture is transferable. Replace the gas engineering documents with your own content, update the system prompt, and you have a domain-specific AI agent for any field. Start simple, iterate outwards. Begin with CAG and a handful of documents. If your needs outgrow the context window, graduate to RAG. Both patterns can run entirely offline. Clone the repository, swap in your own documents, and start building. The best way to learn is to get your hands on the code. This project is open source under the MIT licence. It is a scenario sample for learning and experimentation, not production medical or safety advice. local-cag on GitHub · local-rag on GitHub · Foundry LocalBuilding a Smart Building HVAC Digital Twin with AI Copilot Using Foundry Local
Introduction Building operations teams face a constant challenge: optimizing HVAC systems for energy efficiency while maintaining occupant comfort and air quality. Traditional building management systems display raw sensor data, temperatures, pressures, CO₂ levels—but translating this into actionable insights requires deep HVAC expertise. What if operators could simply ask "Why is the third floor so warm?" and get an intelligent answer grounded in real building state? This article demonstrates building a sample smart building digital twin with an AI-powered operations copilot, implemented using DigitalTwin, React, Three.js, and Microsoft Foundry Local. You'll learn how to architect physics-based simulators that model thermal dynamics, implement 3D visualizations of building systems, integrate natural language AI control, and design fault injection systems for testing and training. Whether you're building IoT platforms for commercial real estate, designing energy management systems, or implementing predictive maintenance for building automation, this sample provides proven patterns for intelligent facility operations. Why Digital Twins Matter for Building Operations Physical buildings generate enormous operational data but lack intelligent interpretation layers. A 50,000 square foot office building might have 500+ sensors streaming metrics every minute, zone temperatures, humidity levels, equipment runtimes, energy consumption. Traditional BMS (Building Management Systems) visualize this data as charts and gauges, but operators must manually correlate patterns, diagnose issues, and predict failures. Digital twins solve this through physics-based simulation coupled with AI interpretation. Instead of just displaying current temperature readings, a digital twin models thermal dynamics, heat transfer rates, HVAC response characteristics, occupancy impacts. When conditions deviate from expectations, the twin compares observed versus predicted states, identifying root causes. Layer AI on top, and operators get natural language explanations: "The conference room is 3 degrees too warm because the VAV damper is stuck at 40% open, reducing airflow by 60%." This application focuses on HVAC, the largest building energy consumer, typically 40-50% of total usage. Optimizing HVAC by just 10% through better controls can save thousands of dollars monthly while improving occupant satisfaction. The digital twin enables "what-if" scenarios before making changes: "What happens to energy consumption and comfort if we raise the cooling setpoint by 2 degrees during peak demand response events?" Architecture: Three-Tier Digital Twin System The application implements a clean three-tier architecture separating visualization, simulation, and state management: The frontend uses React with Three.js for 3D visualization. Users see an interactive 3D model of the three-floor building with color-coded zones indicating temperature and CO₂ levels. Click any equipment, AHUs, VAVs, chillers, to see detailed telemetry. The control panel enables adjusting setpoints, running simulation steps, and activating demand response scenarios. Real-time charts display KPIs: energy consumption, comfort compliance, air quality levels. The backend Node.js/Express server orchestrates simulation and state management. It maintains the digital twin state as JSON, the single source of truth for all equipment, zones, and telemetry. REST API endpoints handle control requests, simulation steps, and AI copilot queries. WebSocket connections push real-time updates to the frontend for live monitoring. The HVAC simulator implements physics-based models: 1R1C thermal models for zones, affinity laws for fan power, chiller COP calculations, CO₂ mass balance equations. Foundry Local provides AI copilot capabilities. The backend uses foundry-local-sdk to query locally running models. Natural language queries ("How's the lobby temperature?") get answered with building state context. The copilot can explain anomalies, suggest optimizations, and even execute commands when explicitly requested. Implementing Physics-Based HVAC Simulation Accurate simulation requires modeling actual HVAC physics. The simulator implements several established building energy models: // backend/src/simulator/thermal-model.js class ZoneThermalModel { // 1R1C (one resistance, one capacitance) thermal model static calculateTemperatureChange(zone, delta_t_seconds) { const C_thermal = zone.volume * 1.2 * 1000; // Heat capacity (J/K) const R_thermal = zone.r_value * zone.envelope_area; // Thermal resistance // Internal heat gains (occupancy, equipment, lighting) const Q_internal = zone.occupancy * 100 + // 100W per person zone.equipment_load + zone.lighting_load; // Cooling/heating from HVAC const airflow_kg_s = zone.vav.airflow_cfm * 0.0004719; // CFM to kg/s const c_p_air = 1006; // Specific heat of air (J/kg·K) const Q_hvac = airflow_kg_s * c_p_air * (zone.vav.supply_temp - zone.temperature); // Envelope losses const Q_envelope = (zone.outdoor_temp - zone.temperature) / R_thermal; // Net energy balance const Q_net = Q_internal + Q_hvac + Q_envelope; // Temperature change: Q = C * dT/dt const dT = (Q_net / C_thermal) * delta_t_seconds; return zone.temperature + dT; } } This model captures essential thermal dynamics while remaining computationally fast enough for real-time simulation. It accounts for internal heat generation from occupants and equipment, HVAC cooling/heating contributions, and heat loss through the building envelope. The CO₂ model uses mass balance equations: class AirQualityModel { static calculateCO2Change(zone, delta_t_seconds) { // CO₂ generation from occupants const G_co2 = zone.occupancy * 0.0052; // L/s per person at rest // Outdoor air ventilation rate const V_oa = zone.vav.outdoor_air_cfm * 0.000471947; // CFM to m³/s // CO₂ concentration difference (indoor - outdoor) const delta_CO2 = zone.co2_ppm - 400; // Outdoor ~400ppm // Mass balance: dC/dt = (G - V*ΔC) / Volume const dCO2_dt = (G_co2 - V_oa * delta_CO2) / zone.volume; return zone.co2_ppm + (dCO2_dt * delta_t_seconds); } } These models execute every simulation step, updating the entire building state: async function simulateStep(twin, timestep_minutes) { const delta_t = timestep_minutes * 60; // Convert to seconds // Update each zone for (const zone of twin.zones) { zone.temperature = ZoneThermalModel.calculateTemperatureChange(zone, delta_t); zone.co2_ppm = AirQualityModel.calculateCO2Change(zone, delta_t); } // Update equipment based on zone demands for (const vav of twin.vavs) { updateVAVOperation(vav, twin.zones); } for (const ahu of twin.ahus) { updateAHUOperation(ahu, twin.vavs); } updateChillerOperation(twin.chiller, twin.ahus); updateBoilerOperation(twin.boiler, twin.ahus); // Calculate system KPIs twin.kpis = calculateSystemKPIs(twin); // Detect alerts twin.alerts = detectAnomalies(twin); // Persist updated state await saveTwinState(twin); return twin; } 3D Visualization with React and Three.js The frontend renders an interactive 3D building view that updates in real-time as conditions change. Using React Three Fiber simplifies Three.js integration with React's component model: // frontend/src/components/BuildingView3D.jsx import { Canvas } from '@react-three/fiber'; import { OrbitControls } from '@react-three/drei'; export function BuildingView3D({ twinState }) { return ( {/* Render building floors */} {twinState.zones.map(zone => ( selectZone(zone.id)} /> ))} {/* Render equipment */} {twinState.ahus.map(ahu => ( ))} ); } function ZoneMesh({ zone, onClick }) { const color = getTemperatureColor(zone.temperature, zone.setpoint); return ( ); } function getTemperatureColor(current, setpoint) { const deviation = current - setpoint; if (Math.abs(deviation) < 1) return '#00ff00'; // Green: comfortable if (Math.abs(deviation) < 3) return '#ffff00'; // Yellow: acceptable return '#ff0000'; // Red: uncomfortable } This visualization immediately shows building state at a glance, operators see "hot spots" in red, comfortable zones in green, and can click any area for detailed metrics. Integrating AI Copilot for Natural Language Control The AI copilot transforms building data into conversational insights. Instead of navigating multiple screens, operators simply ask questions: // backend/src/routes/copilot.js import { FoundryLocalClient } from 'foundry-local-sdk'; const foundry = new FoundryLocalClient({ endpoint: process.env.FOUNDRY_LOCAL_ENDPOINT }); router.post('/api/copilot/chat', async (req, res) => { const { message } = req.body; // Load current building state const twin = await loadTwinState(); // Build context for AI const context = buildBuildingContext(twin); const completion = await foundry.chat.completions.create({ model: 'phi-4', messages: [ { role: 'system', content: `You are an HVAC operations assistant for a 3-floor office building. Current Building State: ${context} Answer questions about equipment status, comfort conditions, and energy usage. Provide specific, actionable information based on the current data. Do not speculate beyond provided information.` }, { role: 'user', content: message } ], temperature: 0.3, max_tokens: 300 }); res.json({ response: completion.choices[0].message.content, model: 'phi-4', timestamp: new Date().toISOString() }); }); function buildBuildingContext(twin) { const alerts = twin.alerts.filter(a => a.active); const zoneStatus = twin.zones.map(z => `${z.name}: ${z.temperature.toFixed(1)}°F (setpoint: ${z.setpoint}°F), CO₂: ${z.co2_ppm}ppm, ${z.occupancy} people` ); return ` Zones: ${zoneStatus.join('\n')} Active Alerts: ${alerts.length} ${alerts.map(a => `- ${a.severity}: ${a.message}`).join('\n')} Energy: ${twin.kpis.total_power_kw.toFixed(1)} kW Chiller: ${twin.chiller.percent_load}% load, ${twin.chiller.cop.toFixed(2)} COP `.trim(); } Example interactions: User: "Why is the third floor conference room warm?" AI: "The Executive Suite on Floor 3 is currently 75.2°F, 3 degrees above the 72°F setpoint. This is due to high occupancy (8 people) and VAV-F3-EXEC operating at reduced airflow (285 CFM vs 450 CFM capacity). AHU-2 is supplying adequate cool air at 55°F. Recommend checking VAV damper position—it may be partially stuck." User: "What's our current energy usage?" AI: "Total building power consumption is 47.3 kW. Breakdown: Chiller (24.1 kW, 51%), AHU fans (12.8 kW, 27%), Pumps (7.2 kW, 15%), Other (3.2 kW, 7%). Chiller is operating at 62% load with a COP of 4.8, which is efficient for current conditions." User: "Activate demand response level 2" AI: "I cannot directly control building systems for safety reasons. To activate DR Level 2, use the Control Panel and click 'Demand Response' → 'Level 2'. This will raise cooling setpoints by 3°F and reduce auxiliary loads, targeting 15% energy reduction." The AI provides grounded, specific answers citing actual equipment IDs and metrics. It refuses to directly execute control commands, instead guiding operators to explicit control interfaces, a critical safety pattern for building systems. Fault Injection for Testing and Training Real building operations experience equipment failures, stuck dampers, sensor drift, communication losses. The digital twin includes comprehensive fault injection capabilities to train operators and test control logic: // backend/src/simulator/fault-injector.js const FAULT_CATALOG = { chillerFailure: { description: 'Chiller compressor failure', apply: (twin) => { twin.chiller.status = 'FAULT'; twin.chiller.cooling_output = 0; twin.alerts.push({ id: 'chiller-fault', severity: 'CRITICAL', message: 'Chiller compressor failure - no cooling available', equipment: 'CHILLER-01' }); } }, stuckVAVDamper: { description: 'VAV damper stuck at current position', apply: (twin, vavId) => { const vav = twin.vavs.find(v => v.id === vavId); vav.damper_stuck = true; vav.damper_position_fixed = vav.damper_position; twin.alerts.push({ id: `vav-stuck-${vavId}`, severity: 'HIGH', message: `VAV ${vavId} damper stuck at ${vav.damper_position}%`, equipment: vavId }); } }, sensorDrift: { description: 'Temperature sensor reading 5°F high', apply: (twin, zoneId) => { const zone = twin.zones.find(z => z.id === zoneId); zone.sensor_drift = 5.0; zone.temperature_measured = zone.temperature_actual + 5.0; } }, communicationLoss: { description: 'Equipment communication timeout', apply: (twin, equipmentId) => { const equipment = findEquipmentById(twin, equipmentId); equipment.comm_status = 'OFFLINE'; equipment.stale_data = true; twin.alerts.push({ id: `comm-loss-${equipmentId}`, severity: 'MEDIUM', message: `Lost communication with ${equipmentId}`, equipment: equipmentId }); } } }; router.post('/api/twin/fault', async (req, res) => { const { faultType, targetEquipment } = req.body; const twin = await loadTwinState(); const fault = FAULT_CATALOG[faultType]; if (!fault) { return res.status(400).json({ error: 'Unknown fault type' }); } fault.apply(twin, targetEquipment); await saveTwinState(twin); res.json({ message: `Applied fault: ${fault.description}`, affectedEquipment: targetEquipment, timestamp: new Date().toISOString() }); }); Operators can inject faults to practice diagnosis and response. Training scenarios might include: "The chiller just failed during a heat wave, how do you maintain comfort?" or "Multiple VAV dampers are stuck, which zones need immediate attention?" Key Takeaways and Production Deployment Building a physics-based digital twin with AI capabilities requires balancing simulation accuracy with computational performance, providing intuitive visualization while maintaining technical depth, and enabling AI assistance without compromising safety. Key architectural lessons: Physics models enable prediction: Comparing predicted vs observed behavior identifies anomalies that simple thresholds miss 3D visualization improves spatial understanding: Operators immediately see which floors or zones need attention AI copilots accelerate diagnosis: Natural language queries get answers in seconds vs. minutes of manual data examination Fault injection validates readiness: Testing failure scenarios prepares operators for real incidents JSON state enables integration: Simple file-based state makes connecting to real BMS systems straightforward For production deployment, connect the twin to actual building systems via BACnet, Modbus, or MQTT integrations. Replace simulated telemetry with real sensor streams. Calibrate model parameters against historical building performance. Implement continuous learning where the twin's predictions improve as it observes actual building behavior. The complete implementation with simulation engine, 3D visualization, AI copilot, and fault injection system is available at github.com/leestott/DigitalTwin. Clone the repository and run the startup scripts to explore the digital twin, no building hardware required. Resources and Further Reading Smart Building HVAC Digital Twin Repository - Complete source code and simulation engine Setup and Quick Start Guide - Installation instructions and usage examples Microsoft Foundry Local Documentation - AI integration reference HVAC Simulation Documentation - Physics model details and calibration Three.js Documentation - 3D visualization framework ASHRAE Standards - Building energy modeling standardsBuilding Your First Local RAG Application with Foundry Local
A developer's guide to building an offline, mobile-responsive AI support agent using Retrieval-Augmented Generation, the Foundry Local SDK, and JavaScript. Imagine you are a gas field engineer standing beside a pipeline in a remote location. There is no Wi-Fi, no mobile signal, and you need a safety procedure right now. What do you do? This is the exact problem that inspired this project: a fully offline RAG-powered support agent that runs entirely on your machine. No cloud. No API keys. No outbound network calls. Just a local language model, a local vector store, and your own documents, all accessible from a browser on any device. In this post, you will learn how it works, how to build your own, and the key architectural decisions behind it. If you have ever wanted to build an AI application that runs locally and answers questions grounded in your own data, this is the place to start. The finished application: a browser-based AI support agent that runs entirely on your machine. What Is Retrieval-Augmented Generation? Retrieval-Augmented Generation (RAG) is a pattern that makes AI models genuinely useful for domain-specific tasks. Rather than hoping the model "knows" the answer from its training data, you: Retrieve relevant chunks from your own documents using a vector store Augment the model's prompt with those chunks as context Generate a response grounded in your actual data The result is fewer hallucinations, traceable answers with source attribution, and an AI that works with your content rather than relying on general knowledge. If you are building internal tools, customer support bots, field manuals, or knowledge bases, RAG is the pattern you want. RAG vs CAG: Understanding the Trade-offs If you have explored AI application patterns before, you have likely encountered Context-Augmented Generation (CAG). Both RAG and CAG solve the same core problem: grounding an AI model's answers in your own content. They take different approaches, and each has genuine strengths and limitations. RAG (Retrieval-Augmented Generation) How it works: Documents are split into chunks, vectorised, and stored in a database. At query time, the most relevant chunks are retrieved and injected into the prompt. Strengths: Scales to thousands or millions of documents Fine-grained retrieval at chunk level with source attribution Documents can be added or updated dynamically without restarting Token-efficient: only relevant chunks are sent to the model Supports runtime document upload via the web UI Limitations: More complex architecture: requires a vector store and chunking strategy Retrieval quality depends on chunking parameters and scoring method May miss relevant content if the retrieval step does not surface it CAG (Context-Augmented Generation) How it works: All documents are loaded at startup. The most relevant ones are selected per query using keyword scoring and injected into the prompt. Strengths: Drastically simpler architecture with no vector database or embeddings All information is always available to the model Minimal dependencies and easy to set up Near-instant document selection Limitations: Constrained by the model's context window size Best suited to small, curated document sets (tens of documents) Adding documents requires an application restart Want to compare these patterns hands-on? There is a CAG-based implementation of the same gas field scenario using whole-document context injection. Clone both repositories, run them side by side, and see how the architectures differ in practice. When Should You Choose Which? Consideration Choose RAG Choose CAG Document count Hundreds or thousands Tens of documents Document updates Frequent or dynamic (runtime upload) Infrequent (restart to reload) Source attribution Per-chunk with relevance scores Per-document Setup complexity Moderate (ingestion step required) Minimal Query precision Better for large or diverse collections Good for keyword-matchable content Infrastructure SQLite vector store (single file) None beyond the runtime For the sample application in this post (20 gas engineering procedure documents with runtime upload), RAG is the clear winner. If your document set is small and static, CAG may be simpler. Both patterns run fully offline using Foundry Local. Foundry Local: Your On-Device AI Runtime Foundry Local is a lightweight runtime from Microsoft that downloads, manages, and serves language models entirely on your device. No cloud account, no API keys, no outbound network calls (after the initial model download). What makes it particularly useful for developers: No GPU required: runs on CPU or NPU, making it accessible on standard laptops and desktops Native SDK bindings: in-process inference via the foundry-local-sdk npm package, with no HTTP round-trips to a local server Automatic model management: downloads, caches, and loads models automatically Hardware-optimised variant selection: the SDK picks the best variant for your hardware (GPU, NPU, or CPU) Real-time progress callbacks: ideal for building loading UIs that show download and initialisation progress The integration code is refreshingly minimal: import { FoundryLocalManager } from "foundry-local-sdk"; // Create a manager and discover models via the catalogue const manager = FoundryLocalManager.create({ appName: "gas-field-local-rag" }); const model = await manager.catalog.getModel("phi-3.5-mini"); // Download if not cached, then load into memory if (!model.isCached) { await model.download((progress) => { console.log(`Download: ${Math.round(progress * 100)}%`); }); } await model.load(); // Create a chat client for direct in-process inference const chatClient = model.createChatClient(); const response = await chatClient.completeChat([ { role: "system", content: "You are a helpful assistant." }, { role: "user", content: "How do I detect a gas leak?" } ]); That is it. No server configuration, no authentication tokens, no cloud provisioning. The model runs in the same process as your application. The Technology Stack The sample application is deliberately simple. No frameworks, no build steps, no Docker: Layer Technology Purpose AI Model Foundry Local + Phi-3.5 Mini Runs locally via native SDK bindings, no GPU required Back end Node.js + Express Lightweight HTTP server, everyone knows it Vector Store SQLite (via better-sqlite3 ) Zero infrastructure, single file on disc Retrieval TF-IDF + cosine similarity No embedding model required, fully offline Front end Single HTML file with inline CSS No build step, mobile-responsive, field-ready The total dependency footprint is three npm packages: express , foundry-local-sdk , and better-sqlite3 . Architecture Overview The five-layer architecture, all running on a single machine. The system has five layers, all running on a single machine: Client layer: a single HTML file served by Express, with quick-action buttons and a responsive chat interface Server layer: Express.js starts immediately and serves the UI plus SSE status and chat endpoints RAG pipeline: the chat engine orchestrates retrieval and generation; the chunker handles TF-IDF vectorisation; the prompts module provides safety-first system instructions Data layer: SQLite stores document chunks and their TF-IDF vectors; documents live as .md files in the docs/ folder AI layer: Foundry Local runs Phi-3.5 Mini on CPU or NPU via native SDK bindings Building the Solution Step by Step Prerequisites You need two things installed on your machine: Node.js 20 or later: download from nodejs.org Foundry Local: Microsoft's on-device AI runtime: winget install Microsoft.FoundryLocal The SDK will automatically download the Phi-3.5 Mini model (approximately 2 GB) the first time you run the application. Getting the Code Running # Clone the repository git clone https://github.com/leestott/local-rag.git cd local-rag # Install dependencies npm install # Ingest the 20 gas engineering documents into the vector store npm run ingest # Start the server npm start Open http://127.0.0.1:3000 in your browser. You will see the status indicator whilst the model loads. Once the model is ready, the status changes to "Offline Ready" and you can start chatting. Desktop view Mobile view How the RAG Pipeline Works Let us trace what happens when a user asks: "How do I detect a gas leak?" The query flow from browser to model and back. 1 Documents are ingested and indexed When you run npm run ingest , every .md file in the docs/ folder is read, parsed (with optional YAML front-matter for title, category, and ID), split into overlapping chunks of approximately 200 tokens, and stored in SQLite with TF-IDF vectors. 2 Model is loaded via the SDK The Foundry Local SDK discovers the model in the local catalogue and loads it into memory. If the model is not already cached, it downloads it first (with progress streamed to the browser via SSE). 3 User sends a question The question arrives at the Express server. The chat engine converts it into a TF-IDF vector, uses an inverted index to find candidate chunks, and scores them using cosine similarity. The top 3 chunks are returned in under 1 ms. 4 Prompt is constructed The engine builds a messages array containing: the system prompt (with safety-first instructions), the retrieved chunks as context, the conversation history, and the user's question. 5 Model generates a grounded response The prompt is sent to the locally loaded model via the Foundry Local SDK's native chat client. The response streams back token by token through Server-Sent Events to the browser. Source references with relevance scores are included. A response with safety warnings and step-by-step guidance The sources panel shows which chunks were used and their relevance Key Code Walkthrough The Vector Store (TF-IDF + SQLite) The vector store uses SQLite to persist document chunks alongside their TF-IDF vectors. At query time, an inverted index finds candidate chunks that share terms with the query, then cosine similarity ranks them: // src/vectorStore.js search(query, topK = 5) { const queryTf = termFrequency(query); this._ensureCache(); // Build in-memory cache on first access // Use inverted index to find candidates sharing at least one term const candidateIndices = new Set(); for (const term of queryTf.keys()) { const indices = this._invertedIndex.get(term); if (indices) { for (const idx of indices) candidateIndices.add(idx); } } // Score only candidates, not all rows const scored = []; for (const idx of candidateIndices) { const row = this._rowCache[idx]; const score = cosineSimilarity(queryTf, row.tf); if (score > 0) scored.push({ ...row, score }); } scored.sort((a, b) => b.score - a.score); return scored.slice(0, topK); } The inverted index, in-memory row cache, and prepared SQL statements bring retrieval time to sub-millisecond for typical query loads. Why TF-IDF Instead of Embeddings? Most RAG tutorials use embedding models for retrieval. This project uses TF-IDF because: Fully offline: no embedding model to download or run Zero latency: vectorisation is instantaneous (it is just maths on word frequencies) Good enough: for 20 domain-specific documents, TF-IDF retrieves the right chunks reliably Transparent: you can inspect the vocabulary and weights, unlike neural embeddings For larger collections or when semantic similarity matters more than keyword overlap, you would swap in an embedding model. For this use case, TF-IDF keeps the stack simple and dependency-free. The System Prompt For safety-critical domains, the system prompt is engineered to prioritise safety, prevent hallucination, and enforce structured responses: // src/prompts.js export const SYSTEM_PROMPT = `You are a local, offline support agent for gas field inspection and maintenance engineers. Behaviour Rules: - Always prioritise safety. If a procedure involves risk, explicitly call it out. - Do not hallucinate procedures, measurements, or tolerances. - If the answer is not in the provided context, say: "This information is not available in the local knowledge base." Response Format: - Summary (1-2 lines) - Safety Warnings (if applicable) - Step-by-step Guidance - Reference (document name + section)`; This pattern is transferable to any safety-critical domain: medical devices, electrical work, aviation maintenance, or chemical handling. Runtime Document Upload Unlike the CAG approach, RAG supports adding documents without restarting the server. Click the upload button to add new .md or .txt files. They are chunked, vectorised, and indexed immediately. The upload modal with the complete list of indexed documents. Adapting This for Your Own Domain The sample project is designed to be forked and adapted. Here is how to make it yours in four steps: 1. Replace the documents Delete the gas engineering documents in docs/ and add your own markdown files. The ingestion pipeline handles any markdown content with optional YAML front-matter: --- title: Troubleshooting Widget Errors category: Support id: KB-001 --- # Troubleshooting Widget Errors ...your content here... 2. Edit the system prompt Open src/prompts.js and rewrite the system prompt for your domain. Keep the structure (summary, safety, steps, reference) and update the language to match your users' expectations. 3. Tune the retrieval In src/config.js : chunkSize: 200 : smaller chunks give more precise retrieval, less context per chunk chunkOverlap: 25 : prevents information falling between chunks topK: 3 : how many chunks to retrieve per query (more gives more context but slower generation) 4. Swap the model Change config.model in src/config.js to any model available in the Foundry Local catalogue. Smaller models give faster responses on constrained devices; larger models give better quality. Building a Field-Ready UI The front end is a single HTML file with inline CSS. No React, no build tooling, no bundler. This keeps the project accessible to beginners and easy to deploy. Design decisions that matter for field use: Dark, high-contrast theme with 18px base font size for readability in bright sunlight Large touch targets (minimum 44px) for operation with gloves or PPE Quick-action buttons that wrap on mobile so all options are visible without scrolling Responsive layout that works from 320px to 1920px+ screen widths Streaming responses via SSE, so the user sees tokens arriving in real time The mobile chat experience, optimised for field use. Testing The project includes unit tests using the built-in Node.js test runner, with no extra test framework needed: # Run all tests npm test Tests cover the chunker, vector store, configuration, and server endpoints. Use them as a starting point when you adapt the project for your own domain. Ideas for Extending the Project Once you have the basics running, there are plenty of directions to explore: Embedding-based retrieval: use a local embedding model for better semantic matching on diverse queries Conversation memory: persist chat history across sessions using local storage or a lightweight database Multi-modal support: add image-based queries (photographing a fault code, for example) PWA packaging: make it installable as a standalone offline application on mobile devices Hybrid retrieval: combine TF-IDF keyword search with semantic embeddings for best results Try the CAG approach: compare with the local-cag sample to see which pattern suits your use case Ready to Build Your Own? Clone the RAG sample, swap in your own documents, and have an offline AI agent running in minutes. Or compare it with the CAG approach to see which pattern suits your use case best. Get the RAG Sample Get the CAG Sample Summary Building a local RAG application does not require a PhD in machine learning or a cloud budget. With Foundry Local, Node.js, and SQLite, you can create a fully offline, mobile-responsive AI agent that answers questions grounded in your own documents. The key takeaways: RAG is ideal for scalable, dynamic document sets where you need fine-grained retrieval with source attribution. Documents can be added at runtime without restarting. CAG is simpler when you have a small, stable set of documents that fit in the context window. See the local-cag sample to compare. Foundry Local makes on-device AI accessible: native SDK bindings, in-process inference, automatic model selection, and no GPU required. TF-IDF + SQLite is a viable vector store for small-to-medium collections, with sub-millisecond retrieval thanks to inverted indexing and in-memory caching. Start simple, iterate outwards. Begin with RAG and a handful of documents. If your needs are simpler, try CAG. Both patterns run entirely offline. Clone the repository, swap in your own documents, and start building. The best way to learn is to get your hands on the code. This project is open source under the MIT licence. It is a scenario sample for learning and experimentation, not production medical or safety advice. local-rag on GitHub · local-cag on GitHub · Foundry LocalBuilding an Offline AI Interview Coach with Foundry Local, RAG, and SQLite
How to build a 100% offline, AI-powered interview preparation tool using Microsoft Foundry Local, Retrieval-Augmented Generation, and nothing but JavaScript. Foundry Local 100% Offline RAG + TF-IDF JavaScript / Node.js Contents Introduction What is RAG and Why Offline? Architecture Overview Setting Up Foundry Local Building the RAG Pipeline The Chat Engine Dual Interfaces: Web & CLI Testing Adapting for Your Own Use Case What I Learned Getting Started Introduction Imagine preparing for a job interview with an AI assistant that knows your CV inside and out, understands the job you're applying for, and generates tailored questions, all without ever sending your data to the cloud. That's exactly what Interview Doctor does. Interview Doctor's web UI, a polished, dark-themed interface running entirely on your local machine. In this post, I'll walk you through how I built an interview prep tool as a fully offline JavaScript application using: Foundry Local — Microsoft's on-device AI runtime SQLite — for storing document chunks and TF-IDF vectors RAG (Retrieval-Augmented Generation) — to ground the AI in your actual documents Express.js — for the web server Node.js built-in test runner — for testing with zero extra dependencies No cloud. No API keys. No internet required. Everything runs on your machine. What is RAG and Why Does It Matter? Retrieval-Augmented Generation (RAG) is a pattern that makes AI models dramatically more useful for domain-specific tasks. Instead of relying solely on what a model learned during training (which can be outdated or generic), RAG: Retrieves relevant chunks from your own documents Augments the model's prompt with those chunks as context Generates a response grounded in your actual data For Interview Doctor, this means the AI doesn't just ask generic interview questions, it asks questions specific to your CV, your experience, and the specific job you're applying for. Why Offline RAG? Privacy is the obvious benefit, your CV and job applications never leave your device. But there's more: No API costs — run as many queries as you want No rate limits — iterate rapidly during your prep Works anywhere — on a plane, in a café with bad Wi-Fi, anywhere Consistent performance — no cold starts, no API latency Architecture Overview Complete architecture showing all components and data flow. The application has two interfaces (CLI and Web) that share the same core engine: Document Ingestion — PDFs and markdown files are chunked and indexed Vector Store — SQLite stores chunks with TF-IDF vectors Retrieval — queries are matched against stored chunks using cosine similarity Generation — relevant chunks are injected into the prompt sent to the local LLM Step 1: Setting Up Foundry Local First, install Foundry Local: # Windows winget install Microsoft.FoundryLocal # macOS brew install microsoft/foundrylocal/foundrylocal The JavaScript SDK handles everything else — starting the service, downloading the model, and connecting: import { FoundryLocalManager } from "foundry-local-sdk"; import { OpenAI } from "openai"; const manager = new FoundryLocalManager(); const modelInfo = await manager.init("phi-3.5-mini"); // Foundry Local exposes an OpenAI-compatible API const openai = new OpenAI({ baseURL: manager.endpoint, // Dynamic port, discovered by SDK apiKey: manager.apiKey, }); ⚠️ Key Insight Foundry Local uses a dynamic port never hardcode localhost:5272 . Always use manager.endpoint which is discovered by the SDK at runtime. Step 2: Building the RAG Pipeline Document Chunking Documents are split into overlapping chunks of ~200 tokens. The overlap ensures important context isn't lost at chunk boundaries: export function chunkText(text, maxTokens = 200, overlapTokens = 25) { const words = text.split(/\s+/).filter(Boolean); if (words.length <= maxTokens) return [text.trim()]; const chunks = []; let start = 0; while (start < words.length) { const end = Math.min(start + maxTokens, words.length); chunks.push(words.slice(start, end).join(" ")); if (end >= words.length) break; start = end - overlapTokens; } return chunks; } Why 200 tokens with 25-token overlap? Small chunks keep retrieved context compact for the model's limited context window. Overlap prevents information loss at boundaries. And it's all pure string operations, no dependencies needed. TF-IDF Vectors Instead of using a separate embedding model (which would consume precious memory alongside the LLM), we use TF-IDF, a classic information retrieval technique: export function termFrequency(text) { const tf = new Map(); const tokens = text .toLowerCase() .replace(/[^a-z0-9\-']/g, " ") .split(/\s+/) .filter((t) => t.length > 1); for (const t of tokens) { tf.set(t, (tf.get(t) || 0) + 1); } return tf; } export function cosineSimilarity(a, b) { let dot = 0, normA = 0, normB = 0; for (const [term, freq] of a) { normA += freq * freq; if (b.has(term)) dot += freq * b.get(term); } for (const [, freq] of b) normB += freq * freq; if (normA === 0 || normB === 0) return 0; return dot / (Math.sqrt(normA) * Math.sqrt(normB)); } Each document chunk becomes a sparse vector of word frequencies. At query time, we compute cosine similarity between the query vector and all stored chunk vectors to find the most relevant matches. SQLite as a Vector Store Chunks and their TF-IDF vectors are stored in SQLite using sql.js (pure JavaScript — no native compilation needed): export class VectorStore { // Created via: const store = await VectorStore.create(dbPath) insert(docId, title, category, chunkIndex, content) { const tf = termFrequency(content); const tfJson = JSON.stringify([...tf]); this.db.run( "INSERT INTO chunks (...) VALUES (?, ?, ?, ?, ?, ?)", [docId, title, category, chunkIndex, content, tfJson] ); this.save(); } search(query, topK = 5) { const queryTf = termFrequency(query); // Score each chunk by cosine similarity, return top-K } } 💡 Why SQLite for Vectors? For a CV plus a few job descriptions (dozens of chunks), brute-force cosine similarity over SQLite rows is near-instant (~1ms). No need for Pinecone, Qdrant, or Chroma — just a single .db file on disk. Step 3: The RAG Chat Engine The chat engine ties retrieval and generation together: async *queryStream(userMessage, history = []) { // 1. Retrieve relevant CV/JD chunks const chunks = this.retrieve(userMessage); const context = this._buildContext(chunks); // 2. Build the prompt with retrieved context const messages = [ { role: "system", content: SYSTEM_PROMPT }, { role: "system", content: `Retrieved context:\n\n${context}` }, ...history, { role: "user", content: userMessage }, ]; // 3. Stream from the local model const stream = await this.openai.chat.completions.create({ model: this.modelId, messages, temperature: 0.3, stream: true, }); // 4. Yield chunks as they arrive for await (const chunk of stream) { const content = chunk.choices[0]?.delta?.content; if (content) yield { type: "text", data: content }; } } The flow is straightforward: vectorize the query, retrieve with cosine similarity, build a prompt with context, and stream from the local LLM. The temperature: 0.3 keeps responses focused — important for interview preparation where consistency matters. Step 4: Dual Interfaces — Web & CLI Web UI The web frontend is a single HTML file with inline CSS and JavaScript — no build step, no framework, no React or Vue. It communicates with the Express backend via REST and SSE: File upload via multipart/form-data Streaming chat via Server-Sent Events (SSE) Quick-action buttons for common follow-up queries (coaching tips, gap analysis, mock interview) The setup form with job title, seniority level, and a pasted job description — ready to generate tailored interview questions. CLI The CLI provides the same experience in the terminal with ANSI-coloured output: npm run cli It walks you through uploading your CV, entering the job details, and then generates streaming questions. Follow-up questions work interactively. Both interfaces share the same ChatEngine class, they're thin layers over identical logic. Edge Mode For constrained devices, toggle Edge mode to use a compact system prompt that fits within smaller context windows: Edge mode activated, uses a minimal prompt for devices with limited resources. Step 5: Testing Tests use the Node.js built-in test runner, no Jest, no Mocha, no extra dependencies: import { describe, it } from "node:test"; import assert from "node:assert/strict"; describe("chunkText", () => { it("returns single chunk for short text", () => { const chunks = chunkText("short text", 200, 25); assert.equal(chunks.length, 1); }); it("maintains overlap between chunks", () => { // Verifies overlapping tokens between consecutive chunks }); }); npm test Tests cover the chunker, vector store, config, prompts, and server API contract, all without needing Foundry Local running. Adapting for Your Own Use Case Interview Doctor is a pattern, not just a product. You can adapt it for any domain: What to Change How Domain documents Replace files in docs/ with your content System prompt Edit src/prompts.js Chunk sizes Adjust config.chunkSize and config.chunkOverlap Model Change config.model — run foundry model list UI Modify public/index.html — it's a single file Ideas for Adaptation Customer support bot — ingest your product docs and FAQs Code review assistant — ingest coding standards and best practices Study guide — ingest textbooks and lecture notes Compliance checker — ingest regulatory documents Onboarding assistant — ingest company handbooks and processes What I Learned Offline AI is production-ready. Foundry Local + small models like Phi-3.5 Mini are genuinely useful for focused tasks. You don't need vector databases for small collections. SQLite + TF-IDF is fast, simple, and has zero infrastructure overhead. RAG quality depends on chunking. Getting chunk sizes right for your use case is more impactful than the retrieval algorithm. The OpenAI-compatible API is a game-changer. Switching from cloud to local was mostly just changing the baseURL . Dual interfaces are easy when you share the engine. The CLI and Web UI are thin layers over the same ChatEngine class. ⚡ Performance Notes On a typical laptop (no GPU): ingestion takes under 1 second for ~20 documents, retrieval is ~1ms, and the first LLM token arrives in 2-5 seconds. Foundry Local automatically selects the best model variant for your hardware (CUDA GPU, NPU, or CPU). Getting Started git clone https://github.com/leestott/interview-doctor-js.git cd interview-doctor-js npm install npm run ingest npm start # Web UI at http://127.0.0.1:3000 # or npm run cli # Interactive terminal The full source code is on GitHub. Star it, fork it, adapt it — and good luck with your interviews! Resources Foundry Local — Microsoft's on-device AI runtime Foundry Local SDK (npm) — JavaScript SDK Foundry Local GitHub — Source, samples, and documentation Local RAG Reference — Reference RAG implementation Interview Doctor (JavaScript) — This project's source codeMicrosoft Foundry Labs: A Practical Fast Lane from Research to Real Developer Work
Why developers need a fast lane from research → prototypes AI engineering has a speed problem, but it is not a shortage of announcements. The hard part is turning research into a useful prototype before the next wave of models, tools, or agent patterns shows up. That gap matters. AI engineers want to compare quality, latency, and cost before they wire a model into a product. Full-stack teams want to test whether an agent workflow is real or just demo. Platform and operations teams want to know when an experiment can graduate into something observable and supportable. Microsoft makes that case directly in introducing Microsoft Foundry Labs: breakthroughs are arriving faster, and time from research to product has compressed from years to months. If you build real systems, the question is not "What is the coolest demo?" It is "Which experiments are worth my next hour, and how do I evaluate them without creating demo-ware?" That is where Microsoft Foundry Labs becomes interesting. What is Microsoft Foundry Labs? Microsoft Foundry Labs is a place to explore early-stage experiments and prototypes from Microsoft, with an explicit focus on research-driven innovation. The homepage describes it as a way to get a glimpse of potential future directions for AI through experimental technologies from Microsoft Research and more. The announcement adds the operating idea: Labs is a single access point for developers to experiment with new models from Microsoft, explore frameworks, and share feedback. That framing matters. Labs is not just a gallery of flashy ideas. It is a developer-facing exploration surface for projects that are still close to research: models, agent systems, UX ideas, and tool experiments. Here's some things you can do on Labs: Play with tomorrow’s AI, today: 30+ experimental projects—from models to agents—are openly available to fork and build upon, alongside direct access to breakthrough research from Microsoft. Go from prototype to production, fast: Seamless integration with Microsoft Foundry gives you access to 11,000+ models with built-in compute, safety, observability, and governance—so you can move from local experimentation to full-scale production without complex containerization or switching platforms. Build with the people shaping the future of AI: Join a thriving community of 25,000+ developers across Discord and GitHub with direct access to Microsoft researchers and engineers to share feedback and help shape the most promising technologies. What Labs is not: it is not a promise that every project has a production deployment path today, a long-term support commitment, or a hardened enterprise operating model. Spotlight: a few Labs experiments worth a developer's attention Phi-4-Reasoning-Vision-15B: A compact open-weight multimodal reasoning model that is interesting if you care about the quality-versus-efficiency tradeoff in smaller reasoning systems. BitNet: A native 1-bit large language model that is compelling for engineers who care about memory, compute, and energy efficiency. Fara-7B: An ultra-compact agentic small language model designed for computer use, which makes it relevant for builders exploring UI automation and on-device agents. OmniParser V2: A screen parsing module that turns interfaces into actionable elements, directly relevant to computer-use and UI-interaction agents. If you want to inspect actual code, the Labs project pages also expose official repository links for some of these experiments, including OmniParser, Magentic-UI, and BitNet. Labs vs. Foundry: how to think about the boundary The simplest mental model is this: Labs is the exploration edge; Foundry is the platform layer. The Microsoft Foundry documentation describes the broader platform as "the AI app and agent factory" to build, optimize, and govern AI apps and agents at scale. That is a different promise from Labs. Foundry is where you move from curiosity to implementation: model access, agent services, SDKs, observability, evaluation, monitoring, and governance. Labs helps you explore what might matter next. Foundry helps you build, optimize, and govern what matters now. Labs is where you test a research-shaped idea. Foundry is where you decide whether that idea can survive integration, evaluation, tracing, cost controls, and production scrutiny. That also means Labs is not a replacement for the broader Foundry workflow. If an experiment catches your attention, the next question is not "Can I ship this tomorrow?" It is "What is the integration path, and how will I measure whether it deserves promotion?" What's real today vs. what's experimental Real today: Labs is live as an official exploration hub, and Foundry is the broader platform for building, evaluating, monitoring, and governing AI apps and agents. Experimental by design: Labs projects are presented as experiments and prototypes, so they still need validation for your use case. A developer's lens: Models, Agents, Observability What makes Labs useful is not that it shows new things. It is that it gives developers a way to inspect those things through the same three concerns that matter in every serious AI system: model choice, agent design, and observability. Diagram description: imagine a loop with three boxes in a row: Models, Agents, and Observability. A forward arrow runs across the row, and a feedback arrow loops from Observability back to Models. The point is that evaluation data should change both model choices and agent design, instead of arriving too late. Models: what to look for in Labs experiments If you are model-curious, Labs should trigger an evaluation mindset, not a fandom mindset. When you see something like Phi-4-Reasoning-Vision-15B or BitNet on the Labs homepage, ask three things: what capability is being demonstrated, what constraints are obvious, and what the integration path would look like. This is where the Microsoft Foundry Playgrounds mindset is useful even if you started in Labs. The documentation emphasizes model comparison, prompt iteration, parameter tuning, tools, safety guardrails, and code export. It also pushes the right pre-production questions: price-to-performance, latency, tool integration, and code readiness. That is how I would use Labs for models: not to choose winners, but to generate hypotheses worth testing. If a Labs experiment looks promising, move quickly into a small evaluation matrix around capability, latency, cost, and integration friction. Agents: what Labs unlocks for agent builders Labs is especially interesting for agent builders because many of the projects point toward orchestration and tool-use patterns that matter in practice. The official announcement highlights projects across models and agentic frameworks, including Magentic-One and OmniParser v2. On the homepage, projects such as Fara-7B, OmniParser V2, TypeAgent, and Magentic-UI point in a similar direction: agents get more useful when they can reason over tools, interfaces, plans, and human feedback loops. For working developers, that means Labs can act as a scouting surface for agent patterns rather than just agent demos. Look for UI or computer-use style agents when your system needs to act through an interface rather than an API. Look for planning or tool-selection patterns when orchestration matters more than raw model quality. My suggestion: when a Labs project looks relevant to agent work, do not ask "Can I copy this architecture?" Ask "Which agent pattern is being explored here, and under what constraints would it be useful in my system?" Observability: how to experiment responsibly and measure what matters Observability is where prototypes usually go to die, because teams postpone it until after they have something flashy. That is backwards. If you care about real systems, tracing, evaluation, monitoring, and governance should start during prototyping. The Microsoft Foundry documentation already puts that operating model in plain view through guidance for tracing applications, evaluating agentic workflows, and monitoring generative AI apps. The Microsoft Foundry Playgrounds page is also explicit that the agents playground supports tracing and evaluation through AgentOps. At the governance layer, the AI gateway in Azure API Management documentation reinforces why this matters beyond demos. It covers monitoring and logging AI interactions, tracking token metrics, logging prompts and completions, managing quotas, applying safety policies, and governing models, agents, and tools. You do not need every one of those controls on day one, but you do need the habit: if a prototype cannot tell you what it did, why it failed, and what it cost, it is not ready to influence a roadmap. "Pick one and try it": a 20-minute hands-on path Keep this lightweight and tool-agnostic. The point is not to memorize a product UI. The point is to run a disciplined experiment. Browse Labs and pick an experiment aligned to your work. Start at Microsoft Foundry Labs and choose one project that is adjacent to a real problem you have: model efficiency, multimodal reasoning, UI agents, debugging workflows, or human-in-the-loop design. Read the project page and jump to the repo or paper if available. Use the Labs entry to understand the claim being made. Then read the supporting material, not just the summary sentence. Define one small test task and explicit success criteria. Keep it concrete: latency budget, accuracy target, cost ceiling, acceptable safety behavior, or failure rate under a narrow scenario. Capture telemetry from the start. At minimum, keep prompts or inputs, outputs, intermediate decisions, and failures. If the experiment involves tools or agents, include tool choices and obvious reasons for failure or recovery. Make a hard call. Decide whether to keep exploring or wait for a stronger production-grade path. "Interesting" is not the same as "ready for integration." Minimal experiment logger (my suggestion): if you want a lightweight way to avoid demo-ware, even a local JSONL log is enough to capture prompts, outputs, decisions, failures, and latency while you compare ideas from Labs. import json import time from pathlib import Path LOG_PATH = Path("experiment-log.jsonl") def record_event(name, payload): # Append one event per line so runs are easy to diff and analyze later. with LOG_PATH.open("a", encoding="utf-8") as handle: handle.write(json.dumps({"event": name, **payload}) + "\n") def run_experiment(user_input): started = time.time() try: # Replace this stub with your real model or agent call. output = user_input.upper() decision = "keep exploring" if len(output) < 80 else "wait" record_event( "experiment_result", { "input": user_input, "output": output, "decision": decision, "latency_ms": round((time.time() - started) * 1000, 2), "failure": None, }, ) except Exception as error: record_event( "experiment_result", { "input": user_input, "output": None, "decision": "failed", "latency_ms": round((time.time() - started) * 1000, 2), "failure": str(error), }, ) raise if __name__ == "__main__": run_experiment("Summarize the constraints of this Labs project.") That script is intentionally boring. That is the point. It gives you a repeatable, runnable starting point for comparing experiments without pretending you already have a full observability stack. Practical tips: how I evaluate Labs experiments before betting a roadmap on them Separate the idea from the implementation path. A strong research direction can still have a weak near-term integration story. Test one workload, not ten. Pick a narrow task that resembles your production reality and see whether the experiment moves the needle. Track cost and latency as first-class metrics. A novel capability that breaks your budget or response-time envelope is still a failed fit. Treat agent demos skeptically unless you can inspect behavior. Tool calls, traces, failure cases, and recovery paths matter more than polished output. Common pitfalls are predictable here. Do not confuse a research win with a deployment path. Labs is for exploration, so you still need to validate integration, safety, and operations. Do not evaluate with vague prompts. Use a narrow task and explicit success criteria, or you will end up comparing vibes instead of outcomes. Do not skip telemetry because the prototype is small. If you cannot inspect failures early, the prototype will teach you very little. Do not ignore known limitations. For example, the Fara-7B project page explicitly notes challenges on more complex tasks, instruction-following mistakes, and hallucinations, which is exactly the kind of constraint you should carry into evaluation. What to explore next Azure AI Foundry Labs matters because it gives developers a practical way to explore research-shaped ideas before they harden into mainstream patterns. The smart move is to use Labs as an input into better platform decisions: explore in Labs, validate with the discipline encouraged by Foundry playgrounds, and then bring the learnings back into the broader Foundry workflow. Takeaway 1: Labs is an exploration surface for early-stage, research-driven experiments and prototypes, not a blanket promise of production readiness. Takeaway 2: The right workflow is Labs for discovery, then Microsoft Foundry for implementation, optimization, evaluation, monitoring, and governance. Takeaway 3: Tracing, evaluations, and telemetry should start during prototyping, because that is how you avoid confusing a compelling demo with a viable system. If you are curious, start with Microsoft Foundry Labs, read the official context in Introducing Microsoft Foundry Labs, and then map what you learn into the platform guidance in Microsoft Foundry documentation. Try this next Open Microsoft Foundry Labs and choose one experiment that matches a real workload you care about. Use the mindset from Microsoft Foundry Playgrounds to define a small validation task around quality, latency, cost, and safety. Write down the minimum telemetry you need before continuing: inputs, outputs, decisions, failures, and token or cost signals. Read the relevant operating guidance in AI gateway in Azure API Management if your experiment may eventually need monitoring, quotas, safety policies, or governance. Promote only the experiments that can explain their value clearly in a Foundry-shaped build, evaluation, and observability workflow.
