DestrezaAI

Azure AI-103: AI Apps and Agents Developer (AI-103)

AI-103 Concept Map (Mind Map): Skill area 1

Every topic from skill area 1 of the exam on one page, with the pairs the exam swaps to trick you. Skill area 1 counts for 25-30% of your score.

1.1 Choose the right Foundry services

Models, retrieval, memory and tools for each job

Pick the model

Large language model (LLM)
A large, general-purpose model for complex reasoning, long content and open-ended tasks.
Small language model (SLM)
A compact model, such as Microsoft’s Phi family, for focused tasks with low latency and cost, even on edge devices.
Multimodal model
Takes in and reasons over several types of input together, such as text with images or audio.
Embedding model
Turns text or images into vectors so they can be searched by meaning.
Foundry Tools
Prebuilt, task-specific AI services: Vision, Language, Speech, Translator, Document Intelligence, Content Understanding. Formerly Azure AI services, and Cognitive Services before that.
Model router
A trained model you deploy once; it analyzes each prompt and sends it to the most suitable underlying model. Routing modes: Balanced, Cost or Quality.

Pick the service for the job

Foundry Models
The catalog for deploying and calling models from Microsoft, OpenAI and other providers, including Azure OpenAI.
Foundry Agent Service
Managed service to build, host and run agents that use models, tools, knowledge and conversation state.
Azure AI Search
Search engine for indexing your content with keyword, vector, hybrid and semantic search; the backbone of most RAG on Azure.
Foundry IQ
A knowledge layer, built on Azure AI Search, that grounds agents in enterprise data from several sources while respecting permissions.
Content Understanding
A Foundry Tool that turns documents, images, audio and video into structured output, for multimodal processing.

Retrieval and indexing methods

Keyword search
Full-text search that matches exact terms, ranked with BM25.
Vector search
Compares embeddings to find content with similar meaning, even with different words.
Hybrid search
Runs keyword and vector search together and merges the results (Reciprocal Rank Fusion).
Semantic ranker
Re-ranks the top results with a language-understanding model, and can return captions and answers.
Integrated vectorization
Azure AI Search chunks and embeds content automatically while indexing, and vectorizes queries too.
Indexer
A crawler that pulls data from a source such as Blob Storage into an index on a schedule.
Agentic retrieval
Uses a model to break a complex question into subqueries, runs them in parallel and merges the results.

Memory, tools and knowledge for agents

Conversation state
The running history of a conversation, kept by Agent Service so the agent follows the current exchange.
Long-term memory
Memory in Foundry Agent Service (preview): a managed store that extracts, keeps and recalls facts and preferences across separate conversations.
File search tool
Lets an agent search files you upload; Agent Service chunks and indexes them for you.
Azure AI Search tool
Connects an agent to an existing Azure AI Search index.
Grounding with Bing Search
Lets an agent ground answers in public, up-to-date web results.
Function, OpenAPI and MCP tools
Let agents call your own code, REST APIs described with OpenAPI, or tools exposed through MCP servers.
Code interpreter
Lets an agent write and run Python in a sandbox, for calculations, data analysis and charts.

1.2 Set up AI solutions in Foundry

Resources, deployment types and pipelines

Foundry infrastructure

Foundry resource
The top-level Azure resource that holds model deployments, security, networking and billing.
Foundry project
A workspace inside the Foundry resource where you build agents, run evaluations and organize files.
Hub-based project
The older project type, hosted by a hub. Still needed for features like prompt flow, managed compute deployments and Azure Machine Learning capabilities.
Connections
Saved, secured links from a project to other resources like Storage, Azure AI Search or Key Vault.
Basic vs standard agent setup
Basic setup lets Agent Service manage storage for files, conversations and vector stores. Standard setup uses your own Azure Storage, Azure AI Search and Azure Cosmos DB, so all agent data stays in your tenant.

Deployment options

Standard types
Pay per token with no commitment: Global Standard, Data Zone Standard, or Standard in a single region. Best-effort capacity.
Provisioned (PTU)
Reserve throughput in provisioned throughput units, at global, data zone or single-region level, for predictable latency.
Global deployment
Requests can be processed in any Azure region worldwide, giving the highest capacity. Global Standard is the usual starting point.
Data Zone deployment
Prompts and responses are processed only within a Microsoft-defined data zone, such as the US or the EU, with higher default quotas than single-region.
Single-region deployment
Requests are processed in the deployment region only. The pay-per-token version of this type is simply called “Standard”.
Batch deployment
Global Batch or Data Zone Batch: asynchronous jobs with separate quota, a 24-hour target turnaround, at 50% less cost than Global Standard.
Serverless API
The deployment option where Microsoft hosts the model. The Standard, Provisioned and Batch types all apply to it.
Managed compute
Deploy open-source or custom models onto dedicated virtual machines, billed for compute time. Uses hub-based projects (Foundry classic).

Configuring deployments and pipelines

Deployment settings
Choose the model version, upgrade policy, quota (tokens per minute) and the guardrail/content filter applied.
CI/CD integration
Automate deployments of models, agents and prompts with GitHub Actions or Azure DevOps, with infrastructure as code (Bicep or Terraform).
Evaluation as a quality gate
Run automated evaluations in the pipeline and block a release if quality or safety scores drop.

1.3 Manage, monitor and secure

Capacity, cost, health and access

Quotas, scaling and cost

Tokens per minute (TPM)
The token quota assigned to a deployment, out of your subscription’s regional quota.
Requests per minute (RPM)
The number of calls a deployment accepts per minute, set in proportion to its TPM.
429 errors and retries
“Too Many Requests” when you exceed limits; handle with retries using exponential backoff.
Cost footprint
Track token usage per deployment and agent, set budgets and alerts in Azure Cost Management.

Monitoring

Azure Monitor and Application Insights
Collect metrics, logs and traces for deployments and agents: latency, errors, token use.
Performance and drift
Watch quality over time as data, users or model versions change.
Safety events
Track how often content filters and prompt shields trigger.
Grounding quality
Measure whether answers are supported by the retrieved sources, with groundedness evaluations.
Index health and relevance
Check indexer runs and errors, ingestion quality, index size, query latency and whether top results are relevant.

Security

Managed identity
An identity Azure manages for your app, so it can access other resources without stored secrets.
User-assigned identity
A standalone managed identity you create once and attach to several resources.
Keyless credentials
Authenticate with Microsoft Entra ID tokens instead of API keys.
Private networking
Private endpoints and disabled public access keep traffic on Azure’s private network.
Role policies (RBAC)
Assign least-privilege roles, such as Foundry User (formerly Azure AI User) to build and use agents and models in a project.
Azure Key Vault
Stores secrets, keys and certificates when you can’t avoid them.

1.4 Responsible AI in practice

Filters, evaluations, audits and agent controls

Safety filters and guardrails

Content filters
Classify prompts and responses for hate, sexual, violence and self-harm, at severity levels safe, low, medium and high.
Blocklists
Custom lists of terms that are always blocked.
Prompt Shields: user attacks
Detect jailbreak attempts typed by the user to bypass the system’s rules.
Prompt Shields: document attacks
Detect indirect prompt injection hidden in documents, emails or web pages the model processes.
Protected material detection
Flags outputs that reproduce known copyrighted text or public code.
Groundedness detection
Checks whether a response is supported by the provided source material.

Responsible AI instrumentation

Quality evaluators
Scores like groundedness, relevance, coherence and fluency, run on test datasets or live traffic.
Groundedness evaluator
Scores whether the answer is supported by the retrieved context.
Relevance evaluator
Scores whether the answer addresses the user’s question.
Safety evaluations
Measure how often a model or agent produces harmful content or falls for attacks.
AI red teaming
Deliberately attacking your own system, manually or with the AI Red Teaming Agent, to find weaknesses first.

Auditing

Trace logging
Record each step of a model or agent run, such as prompts, tool calls and latency, with OpenTelemetry into Application Insights.
Provenance metadata
Records where content came from, such as Content Credentials attached to AI-generated images.
Approval workflows
Require a person to sign off before sensitive actions, deployments or releases go ahead.

Governing agent behavior

Oversight modes
Choose how autonomous an agent is: fully autonomous, or pausing for human approval before certain actions, such as MCP tool calls.
Constraints
Rules that bound an agent: instructions, allowed scope, limits on steps or spending.
Tool-access controls
Give an agent only the tools and permissions it needs, with identities scoped by RBAC.

Part of the Azure AI-103: AI Apps and Agents Developer Study Kit: Concept Maps, Flashcards and practice questions. Also free: the Skill area 1 flashcards. New to the exam? Read the AI-103 study guide.