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What Is Azure OpenAI? Foundry, Data and Privacy Explained

Azure OpenAI is a service that lets developers use OpenAI's AI models inside Microsoft's Azure cloud, run and supported by Microsoft. The part people trip over: it's separate from ChatGPT, and Microsoft Learn now places it inside Microsoft Foundry.

Azure OpenAI is one of those names that turns up in supplier emails and software documentation, usually without anyone explaining it. If you've been told 'we build on Azure OpenAI' and nodded politely, this page is for you.

I'll explain what it is in plain words, how it relates to Microsoft Foundry, what Microsoft says about the data you put through it, and where it fits for a small business. Everything here comes from Microsoft Learn.

What Azure OpenAI is in plain words

Azure OpenAI lets developers and businesses use OpenAI's AI models inside Microsoft's Azure cloud. Microsoft Learn describes the models as hosted and operated by Azure as part of its Foundry Models service, supported by Microsoft.

The simplest picture: ChatGPT is a finished app you chat with. Azure OpenAI is a building block that a company's developers connect to their own software, such as a support assistant or a tool that drafts documents. You'd usually meet it through a product someone has built, not by logging in yourself.

Azure OpenAI and Microsoft Foundry

Names have moved around here, so this part confuses people. Microsoft Learn now places Azure OpenAI inside Microsoft Foundry. Its page on models sold by Azure heads a section 'Azure OpenAI in Microsoft Foundry models' and says these models are part of the Foundry Models service.

Microsoft says models sold by Azure include all Azure OpenAI models plus selected models from other providers, and that availability varies by region and cloud. If you're searching old tutorials, don't be surprised if the screens and menus look different from what's in the current documentation.

Name you might seeWhat it refers to
Azure OpenAIThe models from the maker of ChatGPT, run and supported by Microsoft in Azure
Microsoft FoundryThe wider Azure service that Learn now places Azure OpenAI models inside
ChatGPT and the OpenAI APIServices run by OpenAI itself, separate from Azure OpenAI

Azure OpenAI data privacy according to Microsoft

For most businesses this is the real question. Microsoft Learn's data privacy page says your prompts, completions, embeddings and training data:

  • are not available to other customers
  • are not available to OpenAI or other providers of models sold by Azure
  • are not used to train generative AI foundation models without your permission or instruction

Microsoft also says it hosts the models in its own Azure environment, and that they don't interact with services OpenAI runs, such as ChatGPT or the OpenAI API. The models themselves are stateless, so no prompts or completions are stored in the model.

There's a fair caveat. Microsoft says the service stores and processes data to provide the service and to watch for uses that break the product terms. If abuse indicators are detected, a sample of prompts and completions may be selected for review, first by automated means and then by authorised Microsoft staff where needed, and managed customers can apply to modify abuse monitoring. Features such as the Responses API can store message history in the customer's own Azure tenant, and Microsoft says the customer can delete it at any time.

Safety filtering built into Azure OpenAI

Microsoft says prompts and completions are evaluated in real time for harmful content, and output is filtered against configured thresholds. It calls this Guardrails, previously known as content filters. It's one layer of protection, not a guarantee, so anything customer-facing still needs a human check.

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Why a small business owner should know what Azure OpenAI is

You may never open Azure OpenAI yourself, but it can sit behind tools you use or are offered. When a software company says its assistant is built on it, you now know what that claim means and which questions are fair to ask. That alone makes you a better buyer.

Who uses Azure OpenAI, and who doesn't need to

You'd likely need it if you have developers, or hire them, and you want an AI feature inside your own product or internal system with your data kept inside Azure. You probably don't need it if you simply want an assistant to draft emails or summarise documents. For that, a ready-made tool is far less work.

  • Ready-made assistants: chat apps and Microsoft's own Copilot features, with nothing to build.
  • Azure OpenAI: a component for a developer to build something custom.
  • Agent builders: low-code tools that sit in between.

If you're not sure which route suits your business, my guide to the best AI tools for small business owners starts with the ready-made options. And if you're weighing up a custom build, I help businesses make that call as an AI consultant.

Questions to ask a supplier who uses Azure OpenAI

  • Which deployment type and region process our data?
  • What do you store, for how long, and can we delete it?
  • Has abuse monitoring been modified for your account, and what does that mean for our data?
  • Who reviews the AI's output before it reaches our customers?

Those are fair questions, and a good supplier will have clear answers. Microsoft's Global and DataZone deployment types can process prompts in other locations, so it's worth asking which one applies. I'm not a lawyer, so for contracts and compliance, get advice for your situation.

Frequently asked questions

What is Azure OpenAI?

Azure OpenAI is a way to use OpenAI's models inside Microsoft's Azure cloud, run and supported by Microsoft, usually connected by developers to their own software.

Is Azure OpenAI the same as ChatGPT?

No. Microsoft says the models it hosts in Azure don't interact with services OpenAI runs, such as ChatGPT or the OpenAI API.

Is Azure OpenAI part of Microsoft Foundry?

Microsoft Learn now places Azure OpenAI models inside Microsoft Foundry, under its Foundry Models service.

Does Microsoft use my Azure OpenAI prompts to train models?

Microsoft says prompts, completions, embeddings and training data aren't used to train generative AI foundation models without your permission or instruction.

Does Azure OpenAI store my data?

Microsoft says the models are stateless, but the service processes data to run and to monitor for abuse, and some features store history in your own Azure tenant, which you can delete.

Published and maintained by the Lilach Bullock team, covering marketing, AI and business growth.
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