Every new AI agent your team deploys starts from scratch: no memory of how the business works, where data lives, or what rules apply. And as agentic coding tools spin up applications faster than anyone can govern them, each one risks becoming another silo outside your data layer entirely. Microsoft is addressing both problems directly at Build 2026.
According to VentureBeat’s VB Pulse’s Q1 2026 RAG Infrastructure Market Tracker, hybrid retrieval intent among 100-plus employee organizations tripled from 10.3% in January to 33.3% in March, a signal that enterprises have moved past expanding RAG coverage and are now focused on the architecture underneath it. Shared business context is the part retrieval does not solve.
On the context side, Microsoft is expanding Fabric IQ, its existing business data context layer, into a broader unified system called Microsoft IQ, adding three additional context sources covering how the organization works, what it knows and real-time global signals from the web, so any agent can tap all four as a single foundation. On the application side, Rayfin, a new open-source SDK and CLI, deploys agent-built applications directly to Fabric as a governed production backend, routing application data into the same platform rather than spinning up new silos.
Amir Netz, CTO of Microsoft Fabric, reached for a film analogy to explain where the data platform fits. The green screen of cascading code in “The Matrix” wasn’t atmosphere, it was the layer that built the world Agent Smith operated in.
“Our job in the world of data is creating reality for agents based on data,” Netz told VentureBeat.
Microsoft IQ unifies four context sources into a single agent foundation
Microsoft IQ brings together four context sources that until now existed separately, designed so a developer can connect a new agent to all four in a single integration step.
Work IQ. Captures how the organization operates day to day, drawing on email, documents, meetings and schedules to give agents an understanding of people, teams and workflows.
Foundry IQ. Manages institutional knowledge, curating and indexing knowledge bases so agents understand what it means to work within the organization, what rules apply and what procedures to follow.
Fabric IQ. Models the live operational state of the business through data, defining entities, relationships and business rules grounded in real-time signals from Fabric Real-Time Intelligence. Ontologies, the layer that captures that operational context, are expected to reach GA in the coming months.
Web IQ. Adds real-time global context from the web, giving agents a current picture of the world outside the organization alongside its internal data.
“The agents are going to become highly informed virtual employees,” Netz said. “That’s where the world is heading.”
Rayfin routes agent-built applications into the same data foundation
Building shared context solves one half of the problem. The other is what happens when agents start generating applications. Every new app needs a backend, and without a governed deployment path each one creates a new data silo outside the context layer entirely.
Rayfin provides an enterprise-grade back end and deploys agent-built applications directly to Fabric, so application data lands in Microsoft OneLake by default and feeds back into the Microsoft IQ context layer rather than accumulating outside it.
Microsoft positions Rayfin against Supabase and Neon, the Postgres-compatible backends that agentic coding tools default to. The differentiator is governance: Rayfin routes the entire application fleet through Fabric’s unified data and compliance layer rather than creating isolated silos.
Netz described the relationship as bidirectional. The agent building a Rayfin application draws from the organization’s ontology. The data that application generates then enriches that ontology for the next agent.
Every major data platform is chasing the same answer, but execution is unproven
Microsoft is not the only platform building a shared context layer for agents. Snowflake announced its own context capabilities this week with semantic capabilities. Pinecone has its Nexus platform that expands the vector database to become a knowledge engine and Redis has developed its Iris context and memory platform.
Microsoft’s approach further reinforces the trend that RAG and model availability aren’t the issue anymore.
“Fabric IQ and Rayfin are important because the enterprise AI challenge is no longer just about the model availability,” Robert Kramer, managing partner at KramerERP told VentureBeat. “The real question is whether Microsoft simplifies execution and strengthens trust or adds another layer to an already complex environment.”
