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D2 · Implement AI solutions with Microsoft Foundry

Azure OpenAI Service — Models, Deployments and Content Filtering

Azure OpenAI Service provides enterprise access to OpenAI's models (GPT-5, gpt-image, audio models) with Azure's infrastructure, security and compliance. The AI-901 tests which models to use in which scenario and how content filtering works.

What is Azure OpenAI Service?

is the Azure service that provides access to OpenAI's models (the GPT-5 family, gpt-image, audio models and embeddings) with the guarantees of the Azure platform: regulatory compliance, RBAC, private networking, enterprise SLA, and customer data is not used to train the models.

🏢

Enterprise access

Models are deployed in your own Azure region. Data is not shared with OpenAI nor used to improve the base model.

🔌

Same API

Compatible with OpenAI's API. You can migrate existing applications by only changing the endpoint and the key.

✅

Compliance

SOC 2, ISO 27001, HIPAA, GDPR. Private networks with VNet. Integrates with Azure AD/Entra ID for RBAC.

Available models

GPT-5 / GPT-5.x

Chat & Completions

Multimodal

Complex reasoning, image analysis, advanced code, long-form generation.

GPT-5-mini / GPT-5-nano

Chat & Completions

Multimodal

Chatbots, summaries, classification, extraction. Economical for high volume.

text-embedding-ada-002 / text-embedding-3

Embeddings

Convert text into vectors for RAG, semantic search, clustering.

gpt-image (gpt-image-2)

Image Generation

Generate images from text. Marketing, design, visual prototypes.

gpt-4o-transcribe / Whisper

Speech-to-Text

Audio transcription in dozens of languages. Whisper retires in December 2026.

Embeddings — what they are and what they're for

convert text into numeric vectors that capture semantic meaning. Similar texts have similar vectors. They are used for: (finding relevant documents), semantic search (searching by meaning, not exact words), and (grouping documents by topic). Model to use in Azure: text-embedding-3-small or text-embedding-3-large.

Deployments and endpoints

In Azure OpenAI, you first create a deployment (an instance of the model) with a custom name. API calls use that deployment name, not the base model name. This allows versioning and controlling exactly which model is in use.

Configuration flow

1

Create the Azure OpenAI resource

In the Azure Portal or CLI. Choose a region (model availability varies by region).

2

Create the deployment

Select the base model (e.g., gpt-4o), give it a custom name (e.g., "my-gpt4-prod"), configure the tokens-per-minute quota.

3

Get the endpoint and API key

Endpoint URL: https://{resource}.openai.azure.com/. API key from the Azure Portal or use Managed Identity.

4

Call the API

REST API or SDK (Python, C#, JavaScript). Uses the "deployment_name" parameter instead of "model" from the OpenAI.com API.

Deployment types

Standard: Shared quota. Pay-as-you-go. Ideal for development and moderate workloads.
Provisioned (PTU): Dedicated capacity. Predictable latency. For high-volume production.
Batch: Asynchronous processing of large volumes with a price discount.

Exam trap: deployment name

In Azure OpenAI, the API receives the deployment name (which you choose), not the model name. Two deployments can use the same base model with different names. This is a common exam question.

Related labD5 · Generative AI

Deploy a model in Azure OpenAI Studio

Deploy gpt-4o under your own Azure infrastructure, with your own security and data controls.

Understand what "deploying" a model in Azure OpenAI means
Choose between gpt-4o, gpt-4, and an embeddings model

+1 more...

5 min6 steps

Playground and Microsoft Foundry

Azure OpenAI Playground

Web interface for testing models interactively without writing code. Lets you experiment with system prompts, parameters, and see the generated code.

Chat Playground — interactive conversation
Completions — free-form text (legacy models)
gpt-image — image generation
View the equivalent Python/REST code
Adjust temperature, max tokens, top-p in real time

Microsoft Foundry ()

Unified portal for building and deploying generative AI applications. Goes beyond the playground: includes pipelines, evaluation, RAG and the model catalog.

Model Catalog — 1,000+ models (Azure OpenAI + third-party)
— visual pipelines with LLMs (retires in April 2027; replacement: Microsoft Agent Framework)
Automatic response evaluation
Azure AI Search integrated for RAG
One-click deployment to REST endpoints

Exam: Azure OpenAI Playground vs AI Studio

Playground = quickly test models. AI Studio = build and deploy complete GenAI applications.

Related labD5 · Generative AI

Test an assistant in the Azure OpenAI Playground

Configure a system message and test a real conversation in the chat playground.

Understand the system message's role in the model's behavior
Send a test message and see the model's response

+1 more...

5 min3 steps
Related labD5 · Generative AI

Create a project in Azure AI Foundry

Create the unified workspace for building, evaluating, and deploying generative AI solutions.

Understand Azure AI Foundry as the unified portal for generative AI
Create a project with a new hub

+1 more...

5 min6 steps
Related labD5 · Generative AI

Build a basic flow with Prompt Flow

Orchestrate an input, an LLM node, and a code validation step in an executable visual flow.

Understand Prompt Flow as an orchestrator of prompts, code, and models
Recognize typical flow nodes: input, LLM, code, output

+1 more...

6 min5 steps

Content Filtering

Azure OpenAI includes a content filtering system that applies to both prompts (input) and responses (output). It classifies content into harm categories and can block or log based on the configured level.

Hate

Off / Low / Medium / High

Hate speech, discrimination based on race, gender, religion, origin.

Sexual

Off / Low / Medium / High

Explicit or suggestive sexual content.

Violence

Off / Low / Medium / High

Violent content, instructions for physical harm.

Self-harm

Off / Low / Medium / High

Content that promotes self-harm or suicide.

Jailbreak

On / Off

Attempts to make the model ignore its system instructions.

Protected material

On / Off

Text or code protected by copyright.

How it works

1. The user sends a prompt → the filter analyzes the input.

2. If the input exceeds the configured threshold → the call is blocked (error 400).

3. The model generates a response → the filter analyzes the output.

4. If the output exceeds the threshold → an empty response or an error message is returned.

5. All filtering events are logged for auditing.

Exam trap

Content filtering applies in BOTH directions: input (the user's prompt) and output (the model's response). It's not just filtering what the model says — it also filters what it's asked.

The "Off" level is only available to approved customers with special use cases (e.g., safety research). By default, all levels have active filtering.

Related labD5 · Generative AI

Configure Content Filtering on a generative deployment

Adjust the blocking severity level and verify that a high-risk prompt never reaches the model.

Configure the Content Filtering severity level on a deployment
Verify that a high-risk prompt is blocked before reaching the model

+1 more...

5 min4 steps

Azure OpenAI vs OpenAI.com

DimensionAzure OpenAIOpenAI.com
User dataNot used to train modelsMay be used unless you opt out
ComplianceHIPAA, SOC 2, ISO 27001, GDPRMore limited
Private networkingVNet, Private EndpointPublic internet only
AuthenticationAzure AD / Managed Identity + API keyAPI key only
SLA99.9% (Microsoft SLA)No formal SLA
Available modelsSubset of OpenAI modelsAll OpenAI models
Update speedSlower (requires Azure validation)Faster (first to launch)
PricingSimilar, with a PTU option for volumeStandard pay-as-you-go

Golden rule: Azure OpenAI for enterprises with compliance requirements, sensitive data (healthcare, finance, legal), or that need integration with their existing Azure infrastructure.

Use cases by model

ScenarioModelWhy
24/7 customer support chatbotGPT-5-miniEconomical for high volume, sufficient for general conversation
Analyzing complex legal contractsGPT-5Advanced reasoning, long context, nuanced analysis
Analyzing scanned invoices as imagesGPT-5 (multimodal)Multimodal models accept images in the prompt; alternative: Content Understanding
Semantic search over a document basetext-embedding-3Converts text to vectors for RAG and semantic search
Generating illustrations for e-commercegpt-image-2Image generation model from text
Transcribing recorded meetingsgpt-4o-transcribe or Azure SpeechHigh-accuracy transcription; Whisper retires in December 2026
Code assistant in an IDEGPT-5 / GPT-5-miniGPT-5 for complex code; GPT-5-mini for economical autocomplete

Microsoft Copilot

Microsoft Copilot is the generative AI user experience layer built into Microsoft's products. It uses Azure OpenAI under the hood.

Microsoft 365 Copilot

Microsoft 365

In Word, Excel, PowerPoint, Teams, Outlook. Summarizes meetings, generates documents, analyzes Excel data.

GitHub Copilot

GitHub

Code assistant in VS Code and other IDEs. Autocomplete, test generation, code explanation.

Copilot in Windows

Windows

Assistant built into the operating system. Available in the side panel. Uses Bing + GPT-4.

Copilot Studio

Enterprise

No-code/low-code platform for building custom copilots for businesses. Formerly Power Virtual Agents.

Copilot in Azure

Azure

Assistant in the Azure Portal for IaC, troubleshooting, and resource queries.

Security Copilot

Security

Threat analysis, incident response, and security report generation using natural language.

Exam trap: Copilot vs Azure OpenAI

Microsoft Copilot = ready-to-use product/experience (in M365, Windows, GitHub).
Azure OpenAI Service = infrastructure for building your own applications with OpenAI's models.
Copilot Studio = tool for building custom copilots without being a developer.

Common exam traps

❓ Does Azure OpenAI use your data to train its models?

No. Unlike OpenAI.com (unless you opt out), Azure OpenAI guarantees that customer data is NOT used to improve the models. It's one of the key differences compared to the direct OpenAI API.

❓ Does content filtering apply only to the model's responses?

No. It applies to both the INPUT (the user's prompt) and the OUTPUT (the model's response). If the user's prompt contains harmful content, the call is blocked before it reaches the model.

❓ Do gpt-image models both generate and analyze images?

No. gpt-image models GENERATE images from text. To ANALYZE images (describe what is in a photo, extract text from an image) you use a multimodal model such as GPT-5, Azure AI Vision or Content Understanding. These are different capabilities.

❓ Are Copilot Studio and Azure OpenAI the same thing?

No. Copilot Studio is a low-code platform for building custom bots/copilots (formerly Power Virtual Agents). Azure OpenAI Service is the developer API for building applications with OpenAI models. Both can be integrated together, but they are different products.

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Test what you just learned

A hospital wants to use generative AI to help doctors draft clinical reports. The data is highly confidential (patient medical records). They need guarantees that the data will NOT be used to train external models and must comply with HIPAA. Which service should they use?

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