Microsoft announced significant updates to Microsoft Foundry at Build 2026, positioning it as a production-grade platform for AI agents. Key additions include hosted agent sandboxes with stateful sessions and scheduled routines, Toolboxes for centralized tool and MCP endpoint management, procedural memory showing 7-14% task success rate improvements, and Foundry IQ as a unified knowledge retrieval layer. The model catalog gains four first-party MAI models and Fireworks AI integration. Observability and tracing now work across frameworks like LangChain and Semantic Kernel without requiring stack changes. Direct publishing to Microsoft Teams and Microsoft 365 Copilot is planned for general availability in June 2026, and governance features include encryption, permission sync, and sensitivity label controls.
