Microsoft· Azure AI

Microsoft describes context engineering for enterprise AI agents on Microsoft Foundry, explaining how managing what enters the context window can lower costs and improve performance. The post highlights Foundry IQ for knowledge retrieval and Toolboxes for tool management, reporting that Foundry IQ improved evidence recall by up to 54% while reducing retrieval token costs by 34%, and Toolboxes reduced average input-token consumption by around 97% for large tool libraries.

From the source

Our internal evaluations showed that Foundry IQ knowledge bases improved evidence recall by up to 54% on the BrowseComp-Plus benchmark while reducing retrieval token costs by 34%. ... Toolboxes in Foundry reduced average input-token consumption around 97% for large tool libraries—directly lowering inference costs for customers building agents.

azure.microsoft.com

Announced

02 Sep 2026 16:00 UTC