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Agentic Retrieval & Foundry IQ

📚 RAG & Grounding 9 min 80 BASE XP

latest RAG

Agentic Retrieval (also called Agentic RAG) goes beyond simple search - the AI model intelligently decomposes complex queries into multiple sub-queries for more complete retrieval.

Standard RAG vs Agentic Retrieval

FeatureStandard RAGAgentic Retrieval
Query ProcessingSingle search queryAI decomposes into multiple sub-queries
Context GatheringTop-K nearest resultsMulti-source, cross-referenced results
Complex QuestionsOften misses contextHandles multi-hop reasoning
CostLowerHigher (multiple LLM calls)

Foundry IQ

Foundry IQ is Microsoft's evolved search intelligence layer that enables grounded responses from multiple data sources. As of 2026, it expands into three distinct pillars:

  • Work IQ: Grounds agents in Microsoft 365 Graph data (Teams, Outlook, SharePoint)
  • Fabric IQ: Grounds agents directly in structured enterprise data (SQL, Data Lake)
  • Web IQ: Provides real-time grounding from the Bing search index

Foundry IQ Reaches General Availability

At Microsoft Build 2026, Foundry IQ knowledge bases moved to General Availability as the SLA-backed knowledge layer behind every Foundry agent, alongside two major additions:

  • Foundry IQ MCP Server (GA): Exposes a knowledge base as a remote MCP server so it can be queried from any MCP-compatible host - including Claude, ChatGPT, LangChain, and the Microsoft Agent Framework - with network isolation and document-level security enforced.
  • Foundry IQ Serverless (Public Preview): A no-infrastructure tier billed only on Compute Units consumed, scaling to zero when idle - built for bursty, event-driven agent workloads.
🆕 Build 2026: Microsoft reports the latest agentic retrieval updates improved answer-quality benchmarks by up to 20%, and that knowledge bases improve recall by up to 54% versus single-shot RAG.
💡 Key Insight: Use standard RAG for simple factual Q&A. Switch to Agentic Retrieval when users ask complex, multi-faceted questions that require synthesizing information from multiple sources.
FOUNDRY VERIFICATION
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How does Agentic Retrieval differ from standard RAG?
It uses a different database
The AI decomposes complex queries into multiple sub-queries for complete retrieval
It doesn't use embeddings
It's cheaper