AI Play Book

Foundry IQ

The knowledge layer behind Foundry agents. Replaces custom RAG plumbing with SLA-backed retrieval that unifies enterprise data sources behind one endpoint.

What Foundry IQ Replaces

Without Foundry IQ, building RAG requires: chunking, embedding, indexing, retrieval pipeline, source integration, permission sync - all custom code.

With Foundry IQ: connect data sources, create a knowledge base, wire it to your agent. Foundry handles ingestion, indexing, retrieval, and permissions.

Architecture

IQ Components

Component	Status	Description
Foundry IQ Knowledge Bases	GA	SLA-backed retrieval over connected data sources
Foundry IQ Serverless	Preview	No infrastructure provisioning required
Work IQ	Preview	Grounding in Microsoft 365 data (email, docs, calendar)
Fabric IQ	Preview	Grounding in Fabric data (semantic models, ontology)
Web IQ	Limited access	Live web grounding, sub-200ms, zero data retention
Agentic Retrieval	GA	Multi-step retrieval with reasoning
File Search	GA	Direct file upload and search

Knowledge Base Setup

from azure.ai.projects import AIProjectClient
from azure.identity import DefaultAzureCredential

client = AIProjectClient(
    credential=DefaultAzureCredential(),
    endpoint="https://my-foundry.services.ai.azure.com"
)

# Create knowledge base connected to Azure AI Search
kb = client.knowledge_bases.create(
    name="product-docs",
    data_sources=[
        {"type": "azure_blob", "connection": "my-blob-connection"},
        {"type": "sharepoint", "connection": "my-sp-connection"}
    ]
)

# Wire to agent
agent = client.agents.create(
    model="gpt-5",
    name="docs-agent",
    tools=[{"type": "foundry_iq", "knowledge_base_id": kb.id}]
)

MCP Access

Knowledge bases are queryable via MCP (Model Context Protocol). Any MCP-compatible client can connect:

Endpoint: https://my-foundry.services.ai.azure.com/mcp

Data Pipeline Features

Layout-aware ingestion - understands document structure (headers, tables, lists)
Image serving - extracts and serves embedded images
Broad SharePoint indexing - libraries, lists, pages
Permission sync - respects source ACLs via Purview
Sensitivity labels - governance flows through from source to retrieval

Foundry IQ vs Custom RAG

Dimension	Foundry IQ	Custom RAG
Setup time	Minutes	Days-weeks
Infrastructure	Managed	Self-managed
Permission sync	Automatic (Purview)	Manual
Multi-source	Built-in	Custom per source
SLA	Yes	Depends on implementation
Flexibility	Opinionated	Full control
Best for	Standard enterprise knowledge	Custom retrieval logic, non-Azure sources

Azure AI Search - the retrieval engine underneath Foundry IQ
Foundry Agent Service - agents that consume knowledge bases