Azure Functions adds markdown-first AI agents runtime

Summary

Eliminates boilerplate for agent scaffolding—tools, connectors, and reasoning logic declared in one file instead of scattered code. Reuses familiar Functions operational model (scale-to-zero billing, managed identity, Application Insights) so teams deploy agents like regular functions.

Why it matters

Eliminates boilerplate for agent scaffolding—tools, connectors, and reasoning logic declared in one file instead of scattered code. Reuses familiar Functions operational model (scale-to-zero billing, managed identity, Application Insights) so teams deploy agents like regular functions.

Sources

1. 1.agents are defined in .agent.md files, a markdown-first programming model in which an agent's instructions, tools, connections, and behavior are declared in a single readable document
2. 2.Agents get access to MCP tool servers, sandboxed code, and browser execution via Azure Container Apps dynamic sessions, and the full 1,400+ connector catalog
3. 3.The agents runtime doesn't add any extra cold start beyond what you'd see with a regular HTTP trigger on Flex Consumption. The infra is not the bottleneck, the LLM is.
4. 4.there is no "agents tax": it is billed as a standard function execution with scale-to-zero, identical to running any other function on Flex Consumption
5. 5.The Azure Functions team built a timer-triggered .agent.md agent that continuously audits security posture across all of its GitHub organizations and repositories