Chapter 2: AI-First Development

March 26, 2026 · View on GitHub

📚 Course: AZD For Beginners | ⏱️ Duration: 1-2 hours | ⭐ Complexity: Intermediate

Overview

This chapter focuses on deploying AI-powered applications using Azure Developer CLI and Microsoft Foundry services. From simple AI chat apps to intelligent agents with tools.

Validation note (2026-03-25): The command flow and extension guidance in this chapter were reviewed against azd 1.23.12 and the current preview AI agent extension release azure.ai.agents 0.1.18-preview. If you are on an older AZD build, update first and then continue with the exercises.

Learning Objectives

By completing this chapter, you will:

  • Deploy AI applications using pre-built AZD templates
  • Understand Microsoft Foundry integration with AZD
  • Configure and customize AI agents with tools
  • Deploy RAG (Retrieval-Augmented Generation) applications

📚 Lessons

#LessonDescriptionTime
1Microsoft Foundry IntegrationConnect AZD with Foundry services30 min
2AI Agents GuideDeploy intelligent agents with tools45 min
3AI Model DeploymentDeploy and configure AI models30 min
4AI Workshop LabHands-on: Make your AI solution AZD-ready60 min

🚀 Quick Start

# Option 1: RAG Chat Application
azd init --template azure-search-openai-demo
azd up

# Option 2: AI Agents
azd init --template get-started-with-ai-agents
azd up

# Option 3: Quick Chat App
azd init --template openai-chat-app-quickstart
azd up
TemplateDescriptionServices
azure-search-openai-demoRAG chat with citationsOpenAI + AI Search
get-started-with-ai-agentsAI agent with toolsAI Agent Service
openai-chat-app-quickstartBasic AI chatOpenAI + Container Apps

💰 Cost Awareness

EnvironmentEstimated Monthly Cost
Development$80-150
Staging$150-300
Production$300-3,500+

Tip: Run azd down after testing to avoid charges.

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