Microsoft Semantic Kernel and AutoGen: Open Source Frameworks for AI Solutions
Explore Microsoft’s open-source frameworks, Semantic Kernel and AutoGen. Semantic Kernel enables developers to create AI solutions across various domains using a single Large Language Model (LLM). AutoGen, on the other hand, uses AI Agents to perform smart tasks through agent dialogues. Discover how these technologies serve different scenarios and can be used to build powerful AI applications.Bringing AI to the edge: Hackathon Windows ML
AI Developer Hackathon Windows ML Hosted by Qualcomm on SnapDragonX We’re excited to announce our support and participation for the upcoming global series of Edge AI hackathons, hosted by Qualcomm Technologies. The first is on June 14-15 in Bangalore. We see a world of hybrid AI, developing rapidly as new generation of intelligent applications get built for diverse scenarios. These range from mobile, desktop, spatial computing and extending all the way to industrial and automotive. Mission critical workloads oscillate between decision-making in the moment, on device, to fine tuning models on the cloud. We believe we are in the early stages of development of agentic applications that efficiently run on the edge for scenarios needing local deployment and on-device inferencing. Microsoft Windows ML Windows ML – a cutting-edge runtime optimized for performant on-device model inference and simplified deployment, and the foundation of Windows AI Foundry. Windows ML is designed to support developers creating AI-infused applications with ease, harnessing the incredible strength of Windows’ diverse hardware ecosystem whether it’s for entry-level laptops, Copilot+ PCs or top-of-the-line AI workstations. It’s built to help developers leverage the client silicon best suited for their specific workload on any given device whether it’s an NPU for low-power and sustained inference, a GPU for raw horsepower or CPU for the broadest footprint and flexibility. Introducing Windows ML: The future of machine learning development on Windows - Windows Developer Blog Getting Started To get started, install AI Toolkit, leverage one of our conversion and optimization templates, or start building your own. Explore documentation and code samples available on Microsoft Learn, check out AI Dev Gallery (install, documentation) for demos and more samples to help you get started with Windows ML. Microsoft and Qualcomm Technologies: A strong collaboration Microsoft and Qualcomm Technologies’ collaboration bring new advanced AI features into Copilot+ PCs, leveraging the Snapdragon X Elite. Microsoft Research has played a pivotal role by optimizing new lightweight LLMs, such as Phi Silica, specifically for on-device execution with the Hexagon NPU. These models are designed to run efficiently on Hexagon NPUs, enabling multimodal AI experiences like vision-language tasks directly on Copilot+ PCs without relying on the cloud. Additionally, Microsoft has made DeepSeek R1 7B and 14B distilled models available via Azure AI Foundry, further expanding the AI ecosystem on the edge. This collaboration marks a significant step in democratizing AI by making powerful, efficient models accessible on everyday devices Windows AI Foundry expands AI capabilities by providing high-performance built-in models and supports developers' custom models with silicon performance. This developer platform plays a key role in this collaboration. Windows ML enables Windows 11 and Copilot+ PCs to use the Hexagon NPU for power efficient inference. Scaling optimization through Olive toolchain The Windows ML foundation of the Windows AI Foundry provides a unified platform for AI development across various hardware architectures and brings silicon performance using QNN Execution provider. This stack includes Windows ML and toolchains like Olive, easily accessible in AI Toolkit for VS Code, which streamlines model optimization and deployment. Qualcomm Technologies has contributed to Microsoft’s Olive, an open-source model optimization tool that enhances AI performance by optimizing models for efficient inference on client systems. This tool is particularly beneficial for running LLMs and GenAI workloads on Qualcomm Technologies’ platforms. Real-World Applications Through Qualcomm Technologies and Microsoft’s collaboration we have partnered with top developers to adopt Windows ML and have demonstrated impressive performance for their AI features. Independent Solution Vendors (ISVs) such as Powder, Topaz Labs, Camo and McAfee, Join us at the Hackathon With the recent launch of Qualcomm Snapdragon® X Elite-powered Windows laptops, developers can now take advantage of powerful NPUs (Neural Processing Units) to deploy AI applications that are both responsive and energy-efficient. These new devices open up a world of opportunities for developers to rethink how applications are built from productivity tools to creative assistants and intelligent agents all running directly on the device. Our mission has always been to enable high-quality AI experiences using compact, optimized models. These models are tailor-made for edge computing, offering faster inference, lower memory usage, and enhanced privacy without compromising performance. We encourage all application developers whether you’re building with open-source SLMs (small language models), working on smart assistants, or exploring new on-device AI use cases to join us at the event. You can register here: https://www.qualcomm.com/support/contact/forms/edge-ai-developer-hackathon-bengaluru-proposal-submission Dive deeper into these innovative developer solutions: Windows AI Foundry & Windows ML on Qualcomm NPU Microsoft and Qualcomm Technologies collaborate on Windows 11, Copilot+ PCs and Windows AI Foundry | Qualcomm Unlocking the power of Qualcomm QNN Execution Provider GPU backen Introducing Windows ML: The future of machine learning development on Windows - Windows Developer BlogBuilding AI Agents on edge devices using Ollama + Phi-4-mini Function Calling
The new Phi-4-mini and Phi-4-multimodal now support Function Calling. This feature enables the models to connect with external tools and APIs. By deploying Phi-4-mini and Phi-4-multimodal with Function Calling capabilities on edge devices, we can achieve local expansion of knowledge capabilities and enhance their task execution efficiency. This blog will focus on how to use Phi-4-mini's Function Calling capabilities to build efficient AI Agents on edge devices. What‘s Function Calling How it works First we need to learn how Function Calling works Tool Integration: Function Calling allows LLM/SLM to interact with external tools and APIs, such as weather APIs, databases, or other services. Function Definition: Defines a function (tool) that LLM/SLM can call, specifying its name, parameters, and expected output. LLM Detection: LLM/SLM analyzes the user's input and determines if a function call is required and which function to use. JSON Output: LLM/SLM outputs a JSON object containing the name of the function to call and the parameters required by the function. External Execution: The application executes the function call using the parameters provided by LLM/SLM. Response to LLM: Returns the output of Function Calling to LLM/SLM, and LLM/SLM can use this information to generate a response to the user. Application scenarios Data retrieval: convert natural language queries into API calls to fetch data (e.g., "show my recent orders" triggers a database query) Operation execution: convert user requests into specific function calls (e.g., "schedule a meeting" becomes a calendar API call) Computational tasks: handle mathematical or logical operations through dedicated functions (e.g., calculate compound interest or statistical analysis) Data processing: chain multiple function calls together (e.g., get data → parse → transform → store) UI/UX integration: trigger interface updates based on user interactions (e.g., update map markers or display charts) Phi-4-mini / Phi-4-multimodal's Function Calling Phi-4-mini / Phi-4-multimodal supports single and parallel Function Calling. Things to note when calling You need to define Tools in System to start single or parallel Function Calling If you want to start parallel Function Calling, you also need to add 'some tools' to the System prompt The following is an example Single Function Calling tools = [ { "name": "get_match_result", "description": "get match result", "parameters": { "match": { "description": "The name of the match", "type": "str", "default": "Arsenal vs ManCity" } } }, ] messages = [ { "role": "system", "content": "You are a helpful assistant", "tools": json.dumps(tools), # pass the tools into system message using tools argument }, { "role": "user", "content": "What is the result of Arsenal vs ManCity today?" } ] Full Sample : Click Parallel Function Calling AGENT_TOOLS = { "booking_fight": { "name": "booking_fight", "description": "booking fight", "parameters": { "departure": { "description": "The name of Departure airport code", "type": "str", }, "destination": { "description": "The name of Destination airport code", "type": "str", }, "outbound_date": { "description": "The date of outbound flight", "type": "str", }, "return_date": { "description": "The date of return flight", "type": "str", } } }, "booking_hotel": { "name": "booking_hotel", "description": "booking hotel", "parameters": { "query": { "description": "The name of the city", "type": "str", }, "check_in_date": { "description": "The date of check in", "type": "str", }, "check_out_date": { "description": "The date of check out", "type": "str", } } }, } SYSTEM_PROMPT = """ You are my travel agent with some tools available. """ messages = [ { "role": "system", "content": SYSTEM_PROMPT, "tools": json.dumps(AGENT_TOOLS), # pass the tools into system message using tools argument }, { "role": "user", "content": """I have a business trip from London to New York in March 21 2025 to March 27 2025, can you help me to book a hotel and flight tickets""" } ] Full sample : click Using Ollama and Phi-4-mini Function Calling to Create AI Agents on Edge Devices Ollama is a popular free tool for deploying LLM/SLM locally and can be used in combination with AI Toolkit for VS Code. In addition to being deployed on your PC/Laptop, it can also be deployed on IoT, mobile phones, containers, etc. To use Phi-4-mini on Ollama, you need to use Ollama 0.5.13+. Different quantitative versions are supported on Ollama, as shown in the figure below: Using Ollama, we can deploy Phi-4-mini on the edge, and implement AI Agent with Function Calling under limited computing power, so that Generative AI can be applied more effectively on the edge. Current Issues A sad experience - If you directly use the interface to try to call Ollama in the above way, you will find that Function Calling will not be triggered. There are discussions on Ollama's GitHub Issue. You can enter the Issue https://github.com/ollama/ollama/issues/9437. By modifying the Phi-4-mini Template on the ModelFile to implement a single Function Calling, but the call to Parallel Function Calling still failed. Resolution We have implemented a fix by making a adjustments to the template. We have improved it according to Phi-4-mini's Chat Template and re-modified the Modelfile. Of course, the quantitative model has a huge impact on the results. The adjustments are as follows: TEMPLATE """ {{- if .Messages }} {{- if or .System .Tools }}<|system|> {{ if .System }}{{ .System }} {{- end }} In addition to plain text responses, you can chose to call one or more of the provided functions. Use the following rule to decide when to call a function: * if the response can be generated from your internal knowledge (e.g., as in the case of queries like "What is the capital of Poland?"), do so * if you need external information that can be obtained by calling one or more of the provided functions, generate a function calls If you decide to call functions: * prefix function calls with functools marker (no closing marker required) * all function calls should be generated in a single JSON list formatted as functools[{"name": [function name], "arguments": [function arguments as JSON]}, ...] * follow the provided JSON schema. Do not hallucinate arguments or values. Do to blindly copy values from the provided samples * respect the argument type formatting. E.g., if the type if number and format is float, write value 7 as 7.0 * make sure you pick the right functions that match the user intent Available functions as JSON spec: {{- if .Tools }} {{ .Tools }} {{- end }}<|end|> {{- end }} {{- range .Messages }} {{- if ne .Role "system" }}<|{{ .Role }}|> {{- if and .Content (eq .Role "tools") }} {"result": {{ .Content }}} {{- else if .Content }} {{ .Content }} {{- else if .ToolCalls }} functools[ {{- range .ToolCalls }}{{ "{" }}"name": "{{ .Function.Name }}", "arguments": {{ .Function.Arguments }}{{ "}" }} {{- end }}] {{- end }}<|end|> {{- end }} {{- end }}<|assistant|> {{ else }} {{- if .System }}<|system|> {{ .System }}<|end|>{{ end }}{{ if .Prompt }}<|user|> {{ .Prompt }}<|end|>{{ end }}<|assistant|> {{ end }}{{ .Response }}{{ if .Response }}<|user|>{{ end }} """ We have tested the solution using different quantitative models. In the laptop environment, we recommend that you use the following model to enable single/parallel Function Calling: phi4-mini:3.8b-fp16. Note: you need to bind the defined Modelfile and phi4-mini:3.8b-fp16 together to enable this to work. Please execute the following command in the command line: #If you haven't downloaded it yet, please execute this command firstr ollama run phi4-mini:3.8b-fp16 #Binding with the adjusted Modelfile ollama create phi4-mini:3.8b-fp16 -f {Your Modelfile Path} To test the single Function Calling and Parallel Function Calling of Phi-4-mini. Single Function Calling Parallel Function Calling Full Sample in notebook The above example is just a simple introduction. As we move forward with the development we hope to find simpler ways to apply it on the edge, use Function Calling to expand the scenarios of Phi-4-mini / Phi-4-multimodal, and also develop more usecases in vertical industries. Resources Phi-4 model on Hugging face https://huggingface.co/collections/microsoft/phi-4-677e9380e514feb5577a40e4 Phi-4-mini on Ollama https://ollama.com/library/phi4-mini Learn Function Calling https://huggingface.co/docs/hugs/en/guides/function-calling Phi Cookbook - Samples and Resources for Phi Models https://aka.ms/phicookbookAI Sparks: Unleashing Agents with the AI Toolkit
The final episode of our "AI Sparks" series delved deep into the exciting world of AI Agents and their practical implementation. We also covered a fair part of MCP with Microsoft AI Toolkit extension for VS Code. We kicked off by charting the evolutionary path of intelligent conversational systems. Starting with the rudimentary rule-based Basic Chatbots, we then explored the advancements brought by Basic Generative AI Chatbots, which offered contextually aware interactions. Then we explored the Retrieval-Augmented Generation (RAG), highlighting its ability to ground generative models in specific knowledge bases, significantly enhancing accuracy and relevance. The limitations were also discussed for the above mentioned techniques. The session was then centralized to the theme – Agents and Agentic Frameworks. We uncovered the fundamental shift from basic chatbots to autonomous agents capable of planning, decision-making, and executing tasks. We moved forward with detailed discussion on the distinction between Single Agentic systems, where one core agent orchestrates the process, and Multi-Agent Architectures, where multiple specialized agents collaborate to achieve complex goals. A key part of building robust and reliable AI Agents, as we discussed, revolves around carefully considering four critical factors. Firstly, Knowledge-Providing agents with the right context is paramount for them to operate effectively and make informed decisions. Secondly, equipping agents with the necessary Actions by granting them access to the appropriate tools allows them to execute tasks and achieve desired outcomes. Thirdly, Security is non-negotiable; ensuring agents have access only to the data and services they genuinely need is crucial for maintaining privacy and preventing unintended actions. Finally, establishing robust Evaluations mechanisms is essential to verify that agents are completing tasks correctly and meeting the required standards. These four pillars – Knowledge, Actions, Security, and Evaluation – form the bedrock of any successful agentic implementation. To illustrate the transformative power of AI Agents, we explored several interesting use cases and applications. These ranged from intelligent personal assistants capable of managing schedules and automating workflows to sophisticated problem-solving systems in domains like customer service. A significant portion of the session was dedicated to practical implementation through demonstrations. We highlighted key frameworks that are empowering developers to build agentic systems.: Semantic Kernel: We highlighted its modularity and rich set of features for integrating various AI services and tools. Autogen Studio: The focus here was on its capabilities for facilitating the creation and management of multi-agent conversations and workflows. Agent Service: We discussed its role in providing a more streamlined and managed environment for deploying and scaling AI agents. The major point of attraction was that these were demonstrated using the local LLMs which were hosted using AI Toolkit. This showcased the ease with which developers can utilize VS Code AI toolkit to build and experiment with agentic workflows directly within their familiar development environment. Finally, we demystified the concept of Model Context Protocol (MCP) and demonstrated how seamlessly it can be implemented using the Agent Builder within the VS Code AI Toolkit. We demonstrated this with a basic Website development using MCP. This practical demonstration underscored the toolkit's power in simplifying the development of complex solutions that can maintain context and engage in more natural, multi-step interactions. The "AI Sparks" series concluded with a discussion, where attendees had a clearer understanding of the evolution, potential and practicalities of AI Agents. The session underscored that we are on the cusp of a new era of intelligent systems that are not just reactive but actively work alongside us to achieve goals. The tools and frameworks are maturing, and the possibilities for agentic applications are sparking innovation across various industries. It was an exciting journey, and engagement during the final session on AI Sparks around Agents truly highlighted the transformative potential of this field. "AI Sparks" Series Roadmap: The "AI Sparks" series delved deeper into specific topics using AI Toolkit for Visual Studio Code, including: Introduction to AI toolkit and feature walkthrough: Introduction to the AI Toolkit extension for VS Code a powerful way to explore and integrate the latest AI models from OpenAI, Meta, Deepseek, Mistral, and more. Introduction to SLMs and local model with use cases: Explore Small Language Models (SLMs) and how they compare to larger models. Building RAG Applications: Create powerful applications that combine the strengths of LLMs with external knowledge sources. Multimodal Support and Image Analysis: Working with vision models and building multimodal applications. Evaluation and Model Selection: Evaluate model performance and choose the best model for your needs. Agents and Agentic Frameworks: Exploring the cutting edge of AI agents and how they can be used to build more complex and autonomous systems. The full playlist of the series with all the episodes of "AI Sparks" is available at AI Sparks Playlist. Continue the discussion and questions in Microsoft AI Discord Community where we have a dedicated AI-sparks channel. All the code samples can be found on AI_Toolkit_Samples .We look forward to continuing these insightful discussions in future series!Unlocking the Potential of Phi-3 and C# in AI Development
Unlocking the Potential of Phi-3 and C# in AI Development: A Must-Attend Session for Technical Students Are you a technical student eager to dive into the world of AI and software development? Look no further! We're excited to invite you to an enlightening session that explores the integration of Phi-3 models with C#, presented by the cloud advocates team at Microsoft, featuring Bruno Capuano and Kinfey LoVisual Studio AI Toolkit : Building Phi-3 GenAI Applications
Port Forwarding, a valuable feature within the AI Toolkit, serves as a crucial gateway for seamless communication with the GenAI model. Whether it's through a straightforward API call or leveraging the SDKs, this functionality greatly enhances our ability to harness the power of the LLM/SLM. By enabling Port Forwarding, a plethora of new scenarios unfold, unlocking the full potential of our interactions with the model.Exploring Microsoft's Phi-3 Family of Small Language Models (SLMs) with Azure AI
Dive into the world of small language models (SLMs) with Microsoft's Phi-3 family and learn how to integrate them into real-world applications using Azure AI. Discover step-by-step guidance, practical exercises, and a Gradio-powered chatbot interface to bolster your confidence in deploying and integrating AI. Keep learning and building with Azure AIFunction Calling with Small Language Models
In our previous article on running Phi-4 locally, we built a web-enhanced assistant that could search the internet and provide informed answers. Here's what that implementation looked like: def web_enhanced_query(question): # 1. ALWAYS search (hardcoded decision) search_results = search_web(question) # 2. Inject results into prompt prompt = f"""Here are recent search results: {search_results} Question: {question} Using only the information above, give a clear answer.""" # 3. Model just summarizes what it reads return ask_phi4(endpoint, model_id, prompt) Today, we're upgrading to true function calling. With this, we have ability to transform small language models from passive text generators into intelligent agents that can: Decide when to use external tools Reason which tool bests fit each task Execute real-world actions thrugh apis Function calling represents a significant evolution in AI capabilities. Let's understand where this positions our small language models: Agent Classification Framework Simple Reflex Agents (Basic) React to immediate input with predefined rules Example: Thermostat, basic chatbot Without function calling, models operate here Model-Based Agents (Intermediate) Maintain internal state and context Example: Robot vacuum with room mapping Function calling enables this level Goal-Based Agents (Advanced) Plan multi-step sequences to achieve objectives Example: Route planner, task scheduler Function calling + reasoning enables this Learning Agents (Expert) Adapt and improve over time Example: Recommendation systems Future: Function calling + fine-tuning As usual with these articles, let's get ready to get our hands dirty! Project Setup Let's set up our environment for building function-calling assistants. Prerequisites First, ensure you have Foundry Local installed and a model running. We'll use Qwen 2.5-7B for this tutorial as it has excellent function calling support. Important: Not all small language models support function calling equally. Qwen 2.5 was specifically trained for this capability and provides a reliable experience through Foundry Local. # 1. Check Foundry Local is installed foundry --version # 2. Start the Foundry Local service foundry service start # 3. Download and run Qwen 2.5-7B foundry model run qwen2.5-7b Python Environment Setup # 1. Create Python virtual environment python -m venv venv source venv/bin/activate # Windows: venv\Scripts\activate # 2. Install dependencies pip install openai requests python-dotenv # 3. Get a free OpenWeatherMap API key # Sign up at: https://openweathermap.org/api ``` Create `.env` file: ``` OPENWEATHER_API_KEY=your_api_key_here ``` Building a Weather-Aware Assistant So in this scenario, a user wants to plan outdoor activities but needs weather context. Without function calling, You will get something like this: User: "Should I schedule my team lunch outside at 2pm in Birmingham?" Model: "That depends on weather conditions. Please check the forecast for rain and temperature." However, with fucntion-calling you get an answer that is able to look up the weather and reply with the needed context. We will do that now. Understanding Foundry Local's Function Calling Implementation Before we start coding, there's an important implementation detail to understand. Foundry Local uses a non-standard function calling format. Instead of returning function calls in the standard OpenAI tool_calls field, Qwen models return the function call as JSON text in the response content. For example, when you ask about weather, instead of: # Standard OpenAI format message.tool_calls = [ {"name": "get_weather", "arguments": {"location": "Birmingham"}} ] You get: # Foundry Local format message.content = '{"name": "get_weather", "arguments": {"location": "Birmingham"}}' This means we need to parse the JSON from the content ourselves. Don't worry—this is straightforward, and I'll show you exactly how to handle it! Step 1: Define the Weather Tool Create weather_assistant.py: import os from openai import OpenAI import requests import json import re from dotenv import load_dotenv load_dotenv() # Initialize Foundry Local client client = OpenAI( base_url="http://127.0.0.1:59752/v1/", api_key="not-needed" ) # Define weather tool tools = [ { "type": "function", "function": { "name": "get_weather", "description": "Get current weather information for a location", "parameters": { "type": "object", "properties": { "location": { "type": "string", "description": "The city or location name" }, "units": { "type": "string", "description": "Temperature units", "enum": ["celsius", "fahrenheit"], "default": "celsius" } }, "required": ["location"] } } } ] A tool is necessary because it provides the model with a structured specification of what external functions are available and how to use them. The tool definition contains the function name, description, parameters schema, and information returned. Step 2: Implement the Weather Function def get_weather(location: str, units: str = "celsius") -> dict: """Fetch weather data from OpenWeatherMap API""" api_key = os.getenv("OPENWEATHER_API_KEY") url = "http://api.openweathermap.org/data/2.5/weather" params = { "q": location, "appid": api_key, "units": "metric" if units == "celsius" else "imperial" } response = requests.get(url, params=params, timeout=5) response.raise_for_status() data = response.json() temp_unit = "°C" if units == "celsius" else "°F" return { "location": data["name"], "temperature": f"{round(data['main']['temp'])}{temp_unit}", "feels_like": f"{round(data['main']['feels_like'])}{temp_unit}", "conditions": data["weather"][0]["description"], "humidity": f"{data['main']['humidity']}%", "wind_speed": f"{round(data['wind']['speed'] * 3.6)} km/h" } The model calls this function to get the weather data. it contacts OpenWeatherMap API, gets real weather data and returns it as a python dictionary Step 3: Parse Function Calls from Content This is the crucial step where we handle Foundry Local's non-standard format: def parse_function_call(content: str): """Extract function call JSON from model response""" if not content: return None json_pattern = r'\{"name":\s*"get_weather",\s*"arguments":\s*\{[^}]+\}\}' match = re.search(json_pattern, content) if match: try: return json.loads(match.group()) except json.JSONDecodeError: pass try: parsed = json.loads(content.strip()) if isinstance(parsed, dict) and "name" in parsed: return parsed except json.JSONDecodeError: pass return None Step 4: Main Chat Function with Function Calling and lastly, calling the model. Notice the tools and tool_choice parameter. Tools tells the model it is allowed to output a tool_call requesting that the function be executed. While tool_choice instructs the model how to decide whether to call a tool. def chat(user_message: str) -> str: """Process user message with function calling support""" messages = [ {"role": "user", "content": user_message} ] response = client.chat.completions.create( model="qwen2.5-7b-instruct-generic-cpu:4", messages=messages, tools=tools, tool_choice="auto", temperature=0.3, max_tokens=500 ) message = response.choices[0].message if message.content: function_call = parse_function_call(message.content) if function_call and function_call.get("name") == "get_weather": print(f"\n[Function Call] {function_call.get('name')}({function_call.get('arguments')})") args = function_call.get("arguments", {}) weather_data = get_weather(**args) print(f"[Result] {weather_data}\n") final_prompt = f"""User asked: "{user_message}" Weather data: {json.dumps(weather_data, indent=2)} Provide a natural response based on this weather information.""" final_response = client.chat.completions.create( model="qwen2.5-7b-instruct-generic-cpu:4", messages=[{"role": "user", "content": final_prompt}], max_tokens=200, temperature=0.7 ) return final_response.choices[0].message.content return message.content Step 5: Run the script Now put all the above together and run the script def main(): """Interactive weather assistant""" print("\nWeather Assistant") print("=" * 50) print("Ask about weather or general questions.") print("Type 'exit' to quit\n") while True: user_input = input("You: ").strip() if user_input.lower() in ['exit', 'quit']: print("\nGoodbye!") break if user_input: response = chat(user_input) print(f"Assistant: {response}\n") if __name__ == "__main__": if not os.getenv("OPENWEATHER_API_KEY"): print("Error: OPENWEATHER_API_KEY not set") print("Set it with: export OPENWEATHER_API_KEY='your_key_here'") exit(1) main() Note: Make sure Qwen 2.5 is running in Foundry Local in a new terminal Now let's talk about Model Context Protocol! Our weather assistant works beautifully with a single function, but what happens when you need dozens of tools? Database queries, file operations, calendar integration, email—each would require similar setup code. This is where Model Context Protocol (MCP) comes in. MCP is an open standard that provides pre-built, standardized servers for common tools. Instead of writing custom integration code for every capability, you can connect to MCP servers that handle the complexity for you. With MCP, You only need one command to enable weather, database, and file access npx @modelcontextprotocol/server-weather npx @modelcontextprotocol/server-sqlite npx @modelcontextprotocol/server-filesystem Your model automatically discovers and uses these tools without custom integration code. Learn more: Model Context Protocol Documentation EdgeAI Course - Module 03: MCP Integration Key Takeaways Function calling transforms models into agents - From passive text generators to active problem-solvers Qwen 2.5 has excellent function calling support - Specifically trained for reliable tool use Foundry Local uses non-standard format - Parse JSON from content instead of tool_calls field Start simple, then scale with MCP - Build one tool to understand the pattern, then leverage standards Documentation Running Phi-4 Locally with Foundry Local Phi-4: Small Language Models That Pack a Punch Microsoft Foundry Local GitHub EdgeAI for Beginners Course OpenWeatherMap API Documentation Model Context Protocol Qwen 2.5 Documentation Thank you for reading! I hope this article helps you build more capable AI agents with small language models. Function calling opens up incredible possibilities—from simple weather assistants to complex multi-tool workflows. Start with one tool, understand the pattern, and scale from there.Running Phi-4 Locally with Microsoft Foundry Local: A Step-by-Step Guide
In our previous post, we explored how Phi-4 represents a new frontier in AI efficiency that delivers performance comparable to models 5x its size while being small enough to run on your laptop. Today, we're taking the next step: getting Phi-4 up and running locally on your machine using Microsoft Foundry Local. Whether you're a developer building AI-powered applications, an educator exploring AI capabilities, or simply curious about running state-of-the-art models without relying on cloud APIs, this guide will walk you through the entire process. Microsoft Foundry Local brings the power of Azure AI Foundry to your local device without requiring an Azure subscription, making local AI development more accessible than ever. So why do you want to run Phi-4 Locally? Before we dive into the setup, let's quickly recap why running models locally matters: Privacy and Control: Your data never leaves your machine. This is crucial for sensitive applications in healthcare, finance, or education where data privacy is paramount. Cost Efficiency: No API costs, no rate limits. Once you have the model downloaded, inference is completely free. Speed and Reliability: No network latency or dependency on external services. Your AI applications work even when you're offline. Learning and Experimentation: Full control over model parameters, prompts, and fine-tuning opportunities without restrictions. With Phi-4's compact size, these benefits are now accessible to anyone with a modern laptop—no expensive GPU required. What You'll Need Before we begin, make sure you have: Operating System: Windows 10/11, macOS (Intel or Apple Silicon), or Linux RAM: Minimum 16GB (32GB recommended for optimal performance) Storage: At least 5 - 10GB of free disk space Processor: Any modern CPU (GPU optional but provides faster inference) Note: Phi-4 works remarkably well even on consumer hardware 😀. Step 1: Installing Microsoft Foundry Local Microsoft Foundry Local is designed to make running AI models locally as simple as possible. It handles model downloads, manages memory efficiently, provides OpenAI-compatible APIs, and automatically optimizes for your hardware. For Windows Users: Open PowerShell or Command Prompt and run: winget install Microsoft.FoundryLocal For macOS Users (Apple Silicon): Open Terminal and run: brew install microsoft/foundrylocal/foundrylocal Verify Installation: Open your terminal and type. This should return the Microsoft Foundry Local version, confirming installation: foundry --version Step 2: Downloading Phi-4-Mini For this tutorial, we'll use Phi-4-mini, the lightweight 3.8 billion parameter version that's perfect for learning and experimentation. Open your terminal and run: foundry model run phi-4-mini You should see your download begin and something similar to the image below Available Phi Models on Foundry Local While we're using phi-4-mini for this guide, Foundry Local offers several Phi model variants and other open-source models optimized for different hardware and use cases: Model Hardware Type Size Best For phi-4-mini GPU chat-completion 3.72 GB Learning, fast responses, resource-constrained environments with GPU phi-4-mini CPU chat-completion 4.80 GB Learning, fast responses, CPU-only systems phi-4-mini-reasoning GPU chat-completion 3.15 GB Reasoning tasks with GPU acceleration phi-4-mini-reasoning CPU chat-completion 4.52 GB Mathematical proofs, logic puzzles with lower resource requirements phi-4 GPU chat-completion 8.37 GB Maximum reasoning performance, complex tasks with GPU phi-4 CPU chat-completion 10.16 GB Maximum reasoning performance, CPU-only systems phi-3.5-mini GPU chat-completion 2.16 GB Most lightweight option with GPU support phi-3.5-mini CPU chat-completion 2.53 GB Most lightweight option, CPU-optimized phi-3-mini-128k GPU chat-completion 2.13 GB Extended context (128k tokens), GPU-optimized phi-3-mini-128k CPU chat-completion 2.54 GB Extended context (128k tokens), CPU-optimized phi-3-mini-4k GPU chat-completion 2.13 GB Standard context (4k tokens), GPU-optimized phi-3-mini-4k CPU chat-completion 2.53 GB Standard context (4k tokens), CPU-optimized Note: Foundry Local automatically selects the best variant for your hardware. If you have an NVIDIA GPU, it will use the GPU-optimized version. Otherwise, it will use the CPU-optimized version. run the command below to see full list of models foundry model list Step 3: Test It Out Once the download completes, an interactive session will begin. Let's test Phi-4-mini's capabilities with a few different prompts: Example 1: Explanation Phi-4-mini provides a thorough, well-structured explanation! It starts with the basic definition, explains the process in biological systems, gives real-world examples (plant cells, human blood cells). The response is detailed yet accessible. Example 2: Mathematical Problem Solving Excellent step-by-step solution! Phi-4-mini breaks down the problem methodically: 1. Distributes on the left side 2. Isolates the variable terms 3. Simplifies progressively 4. Arrives at the final answer: x = 11 The model shows its work clearly, making it easy to follow the logic and ideal for educational purposes Example 3: Code Generation The model provides a concise Python function using string slicing ([::-1]) - the most Pythonic approach to reversing a string. It includes clear documentation with a docstring explaining the function's purpose, provides example usage demonstrating the output, and even explains how the slicing notation works under the hood. The response shows that the model understands not just how to write the code, but why this approach is preferred - noting that the [::-1] slice notation means "start at the end of the string and end at position 0, move with the step -1, negative one, which means one step backwards." This showcases the model's ability to generate production-ready code with proper documentation while being educational about Python idioms. To exit the interactive session, type `/bye` Step 4: Extending Phi-4 with Real-Time Tools Understanding Phi-4's Knowledge Cutoff Like all language models, Phi-4 has a knowledge cutoff date from its training data (typically several months old). This means it won't know about very recent events, current prices, or breaking news. For example, if you ask "Who won the 2024 NBA championship?" it might not have the answer. The good thing is, there's a powerful work-around. While Phi-4 is incredibly capable, connecting it to external tools like web search, databases, or APIs transforms it from a static knowledge base into a dynamic reasoning engine. This is where Microsoft Foundry's REST API comes in. Microsoft Foundry provides a simple API that lets you integrate Phi-4 into Python applications and connect it to real-time data sources. Here's a practical example: building a web-enhanced AI assistant. Web-Enhanced AI Assistant This simple application combines Phi-4's reasoning with real-time web search, allowing it to answer current questions accurately. Prerequisites: pip install foundry-local-sdk requests ddgs Create phi4_web_assistant.py: import requests from foundry_local import FoundryLocalManager from ddgs import DDGS import json def search_web(query): """Search the web and return top results""" try: results = list(DDGS().text(query, max_results=3)) if not results: return "No search results found." search_summary = "\n\n".join([ f"[Source {i+1}] {r['title']}\n{r['body'][:500]}" for i, r in enumerate(results) ]) return search_summary except Exception as e: return f"Search failed: {e}" def ask_phi4(endpoint, model_id, prompt): """Send a prompt to Phi-4 and stream response""" response = requests.post( f"{endpoint}/chat/completions", json={ "model": model_id, "messages": [{"role": "user", "content": prompt}], "stream": True }, stream=True, timeout=180 ) full_response = "" for line in response.iter_lines(): if line: line_text = line.decode('utf-8') if line_text.startswith('data: '): line_text = line_text[6:] # Remove 'data: ' prefix if line_text.strip() == '[DONE]': break try: data = json.loads(line_text) if 'choices' in data and len(data['choices']) > 0: delta = data['choices'][0].get('delta', {}) if 'content' in delta: chunk = delta['content'] print(chunk, end="", flush=True) full_response += chunk except json.JSONDecodeError: continue print() return full_response def web_enhanced_query(question): """Combine web search with Phi-4 reasoning""" # By using an alias, the most suitable model will be downloaded # to your device automatically alias = "phi-4-mini" # Create a FoundryLocalManager instance. This will start the Foundry # Local service if it is not already running and load the specified model. manager = FoundryLocalManager(alias) model_info = manager.get_model_info(alias) print("🔍 Searching the web...\n") search_results = search_web(question) prompt = f"""Here are recent search results: {search_results} Question: {question} Using only the information above, give a clear answer with specific details.""" print("🤖 Phi-4 Answer:\n") return ask_phi4(manager.endpoint, model_info.id, prompt) if __name__ == "__main__": # Try different questions question = "Who won the 2024 NBA championship?" # question = "What is the latest iPhone model released in 2024?" # question = "What is the current price of Bitcoin?" print(f"Question: {question}\n") print("=" * 60 + "\n") web_enhanced_query(question) print("\n" + "=" * 60) Run It: python phi4_web_assistant.py What Makes This Powerful By connecting Phi-4 to external tools, you create an intelligent system that: Accesses Real-Time Information: Get news, weather, sports scores, and breaking developments Verifies Facts: Cross-reference information with multiple sources Extends Capabilities: Connect to databases, APIs, file systems, or any other tool Enables Complex Applications: Build research assistants, customer support bots, educational tutors, and personal assistants This same pattern can be applied to connect Phi-4 to: Databases: Query your company's internal data APIs: Weather services, stock prices, translation services File Systems: Analyze documents and spreadsheets IoT Devices: Control smart home systems The possibilities are endless when you combine local AI reasoning with real-world data access. Troubleshooting Common Issues Service not running: Make sure Foundry Local is properly installed and the service is running. Try restarting with foundry --version to verify installation. Model downloads slowly: Check your internet connection and ensure you have enough disk space (5-10GB per model). Out of memory: Close other applications or try using a smaller model variant like phi-3.5-mini instead of the full phi-4. Connection issues: Verify that no other services are using the same ports. Foundry Local typically runs on http://localhost:5272. Model not found: Run foundry model list to see available models, then use foundry model run <model-name> to download and run a specific model. Your Next Steps with Foundry Local Congratulations! You now have Phi-4 running locally through Microsoft Foundry Local and understand how to extend it with external tools like web search. This combination of local AI reasoning with real-time data access opens up countless possibilities for building intelligent applications. Coming in Future Posts In the coming weeks, we'll explore advanced topics using Hugging Face: Fine-tuning Phi models on your own data for domain-specific applications Phi-4-multimodal: Analyze images, process audio, and combine multiple data types Advanced deployment patterns: RAG systems and multi-agent orchestration Resources to Explore EdgeAI for Beginners Course: Comprehensive 36-45 hour course covering Edge AI fundamentals, optimization, and production deployment Phi-4 Technical Report: Deep dive into architecture and benchmarks Phi Cookbook on GitHub: Practical examples and recipes Foundry Local Documentation: Complete technical documentation and API reference Module 08: Foundry Local Toolkit: 10 comprehensive samples including RAG applications and multi-agent systems Keep experimenting with Foundry Local, and stay tuned as we unlock the full potential of Edge AI! What will you build with Phi-4? Share your ideas and projects in the comments below!Phi-4: Small Language Models That Pack a Punch
What Are Small Language Models, and Why Should You Care? If you've been following AI development, you can probably recall "bigger is better" being the mantra for years. GPT-3.5 was 175 billion parameters, GPT-4 is even larger, and everyone seemed to be in an arms race to build the biggest model possible. But here's the thing: bigger models are expensive to run, slow to respond, and often overkill for what you actually need. Small Language Models (SLMs) flip this script. These are models with fewer parameters (typically 1-15 billion) that are trained really thoughtfully on high-quality data. The outcome of this is models that can run on your laptop, respond instantly, and still handle complex reasoning tasks. You can extrapolate from this, increased speed, privacy, and cost-effectiveness. Microsoft's been exploring this space for a while. It started with Phi-1, which showed that small models trained on carefully curated "textbook-like" data could punch way above their weight class. Then came Phi-2 and Phi-3, each iteration getting better at reasoning and problem-solving. Now we have Phi-4, and it's honestly impressive. At 14 billion parameters, it outperforms models that are 5 times its size on math and reasoning tasks. Microsoft trained it on 9.8 trillion tokens over three weeks, using a mix of synthetic data (generated by larger models like GPT-4o) and high-quality web content. The key innovation isn't just throwing more data at it but they were incredibly selective about what to include, focusing on teaching reasoning patterns rather than memorizing facts. The Phi family has also expanded recently. There's Phi-4-mini at 3.8 billion parameters for even lighter deployments, and Phi-4-multimodal at 5.6 billion parameters that can handle text, images, and audio all at once. Pretty cool if you're building something that needs to understand screenshots or transcribe audio. How Well Does It Actually Perform? Let's talk numbers, because that's where Phi-4 really shines. On MMLU (a broad test of knowledge across 57 subjects), Phi-4 scores 84.8%. That's better than Phi-3's 77.9% and competitive with models like GPT-4o-mini. On MATH (competition-level math problems), it hits 56.1%, which is significantly higher than Phi-3's 42.5%. For code generation on HumanEval, it achieves 82.6%. Model Parameters MMLU MATH HumanEval Phi-3-medium 14B 77.9% 42.5% 62.5% Phi-4 14B 84.8% 56.1% 82.6% Llama 3.3 70B 86.0% ~51% ~73% GPT-4o-mini Unknown ~82% 52.2% 87.2% Microsoft tested Phi-4 on the November 2024 AMC-10 and AMC-12 math competitions. These are tests that over 150,000 high school students take each year, and the questions appeared after all of Phi-4's training data was collected. Phi-4 beat not just similar-sized models, but also much larger ones. That suggests it's actually learned to reason, not just memorize benchmark answers. The model also does well on GPQA (graduate-level science questions) and even outperforms its teacher model GPT-4o on certain reasoning tasks. That's pretty remarkable for a 14 billion parameter model. If you're wondering about practical performance, Phi-4 runs about 2-4x faster than comparable larger models and uses significantly less memory. You can run it on a single GPU or even on newer AI-capable laptops with NPUs. That makes it practical for real-time applications where latency matters. Try Phi-4 Yourself You can start experimenting with Phi-4 right now without any complicated setup. Azure AI Foundry Microsoft's Azure AI Foundry is probably the quickest way to get started. Once you're logged in: Go to the Model Catalog and search for "Phi-4" Click "Use this Model" Select an active subscription in the subsequent pop-up and confirm Deploy and start chatting or testing prompts The playground lets you adjust parameters like temperature and see how the model responds. You can test it on math problems, coding questions, or reasoning tasks without writing any code. There's also a code view that shows you how to integrate it into your own applications. Hugging Face (for open-source enthusiasts) If you prefer to work with open-source tools, the model weights are available on Hugging Face. You can run it locally or use their hosted inference API: # Use a pipeline as a high-level helper from transformers import pipeline pipe = pipeline("text-generation", model="microsoft/phi-4") messages = [ {"role": "user", "content": "What's the derivative of x²?"}, ] pipe(messages) Other Options The Phi Cookbook on GitHub has tons of examples for different use cases like RAG (retrieval-augmented generation), function calling, and multimodal inputs. If you want to run it locally with minimal setup, you can use Ollama (ollama pull phi-4) or LM Studio, which provides a nice GUI. The Azure AI Foundry Labs also has experimental features where you can test Phi-4-multimodal with audio and image inputs. What's Next? Phi-4 is surprisingly capable for its size, and it's practical enough to run almost anywhere. Whether you're building a chatbot, working on educational software, or just experimenting with AI, it's worth checking out. We might explore local deployment in more detail later, including how to build multi-agent systems where several SLMs work together, and maybe even look at fine-tuning Phi-4 for specific tasks. But for now, give it a try and see what you can build with it. The model weights are MIT licensed, so you're free to use them commercially. Microsoft's made it pretty easy to get started, so there's really no reason not to experiment. Resources: Azure AI Foundry Phi-4 on Hugging Face Phi Cookbook Phi-4 Technical Report
