We are almost a century removed from when a group of computer scientists at Dartmouth College coined the term “Artificial Intelligence.” In the 75-year span, AI has become common vernacular, making inroads from imagined to mainstream. Today, we see entire industries being disrupted and entire ecosystems revolutionized by AI. To keep up, the way developers work and the tools they use have had to evolve. Every developer now needs to be an AI developer, and every system—from compute and storage to the data layer—now needs to be AI ready.
The database reimagined
New AI applications require databases that are not only reliable, extensible, and secure, but also AI-ready. In parallel, the way developers build software is being reshaped by AI. 1Most developers—more than 80%—now use AI tools in their workflow. This has led to notable productivity gains and it’s changing expectations for developer experience.
PostgreSQL has emerged as a top choice among developers and is becoming the default starting point for many new applications and projects. Favored by developers for its reliability, extensibility, and rapid innovation, 2PostgreSQL is chosen by 78.6% of developers that are building AI and real-time applications.
PostgreSQL on Azure meets the moment
Selecting the right ecosystem is critical to support your AI and agentic aspirations, and we’ve made great strides in bolstering our PostgreSQL managed services to meet the needs of today’s developer. At Microsoft, we’ve embraced PostgreSQL not just as a product, but as a community. We’re proud to be one of the top contributors to the PostgreSQL open-source project, with more than 500 commits in the latest release. We are continuously innovating to make PostgreSQL the best database for building intelligent applications, and Azure the best place to run them.
The existing Azure Database for PostgreSQL continues to cater to lift-and-shift and new open-source workloads with improved performance and experience, while the new Azure HorizonDB, introduced at Ignite, targets the future by offering a PostgreSQL-compatible cloud service built for scale-out and ultra-low latency. Together, they position Azure to support developers building everything from small apps and agents to AI-powered, mission-critical systems, and anything in between.
A frictionless and intelligent developer experience
Building intelligent applications should feel intuitive, not intimidating. The Microsoft team has invested in making Azure Database for PostgreSQL a frictionless experience, especially for those building AI apps and agents. From provisioning to AI integration and scale, we’ve reimagined the developer experience to remove friction at every step.
Start in the IDE you love
The journey begins in Visual Studio Code—the leader in integrated development environments (IDEs) among developers—by a mile. With our PostgreSQL extension for Visual Studio Code, developers can now provision secure, fully managed PostgreSQL instances on Azure directly from the IDE. No portal hopping or manual setup. Just a few clicks, and your database is ready to go with built-in support for Entra ID authentication and Azure Monitor.
From there, GitHub Copilot becomes your intelligent assistant. It understands your PostgreSQL schema and helps you write, optimize, and debug SQL queries using natural language. Whether you’re joining tables, creating indexes, or exploring performance issues, Copilot is right there with you offering expert-level guidance to save time and improve performance.
Access in-database intelligence for smarter, faster apps
Once your database is live, you’re just a query away from infusing AI into your application. Azure Database for PostgreSQL now supports seamless integration with Microsoft Foundry, enabling developers to invoke pre-provisioned large language models (LLMs) in SQL. You can generate embeddings, classify text, or perform semantic search without leaving the database.
For applications that rely on relevance and speed, our DiskANN vector indexing delivers high-performance similarity search. Combined with semantic ranking, your queries return more accurate results, faster. This is ideal for powering intelligent agents, recommendations, and natural language interfaces.
Build intelligent agents with Microsoft Foundry
When you’re ready to build AI agents, Microsoft Foundry’s native PostgreSQL integration makes it easy. Using the new Model Context Protocol (MCP) server for PostgreSQL, developers can connect PostgreSQL directly to Foundry’s agent framework with a few clicks and permissions. This allows agents to reason over your data, invoke LLMs, and act on insights. And, of course, this is all backed by Azure’s enterprise-grade security and governance.
It’s a powerful combination: PostgreSQL’s structured data, Foundry’s orchestration, and Azure’s AI models working together to deliver intelligent, context-aware applications.
Leverage zero extract, transform, load (ETL) real-time analytics
Intelligent applications thrive on fresh insights. With Azure Database for PostgreSQL, you can mirror your operational data into Microsoft Fabric for real-time analytics without impacting performance. Alternatively, we’ve also enabled support for Parquet via the Azure Storage Extension, letting customers directly read from and write to Parquet files stored in Azure Storage from their Postgres databases, using SQL commands.
This means faster time to insight, fewer moving parts, and more time spent building.
Performance and scale that grows with you
All this intelligence is meaningless if the database isn’t secure and performant. As such, we’ve continued to innovate to unlock better performance and scale to meet the needs of even the most demanding, hypergrowth AI workloads. With PostgreSQL 18 now generally available on Azure, you get faster I/O, improved vacuuming, and smarter query planning. Our new V6 compute SKUs deliver higher throughput and lower latency, while Elastic Clusters enable horizontal scaling for multi-tenant and high-volume workloads.
Whether you’re building a startup MVP or scaling a global AI platform, Azure Database for PostgreSQL is ready to grow with you. Our customers have already been utilizing these new capabilities to build competitive advantage in industries from pharma to finance.
Real-world AI on Azure: How Nasdaq reinvented governance with PostgreSQL
When people think of Nasdaq, they picture trading floors and financial data moving at lightning speed. But behind the scenes, Nasdaq also manages board governance for thousands of organizations, including nearly half of the Fortune 500. At Ignite, Nasdaq shared how they modernized their Boardvantage platform using Azure Database for PostgreSQL and Microsoft Foundry.
Their goal: introduce AI to help directors navigate 500-page board packets and extract insights, without compromising security or compliance.
The result? A governance platform that uses AI to summarize meeting minutes, flag anomalies, and surface relevant decisions while keeping each customer’s data isolated and protected.
Looking ahead: Azure HorizonDB and the future of intelligent apps
At Ignite, we also introduced Azure HorizonDB, a new, fully managed PostgreSQL-compatible service built for AI-native workloads. With scale-out compute, sub-millisecond latency, and built-in AI features, Azure HorizonDB represents the future of cloud databases. While the service is currently in private preview, it’s a glimpse of what’s coming.
The future is open, intelligent, and built on Azure
At Microsoft, our mission is to offer customers databases equipped for next-generation development, whether they be SQL, NoSQL, relational, or open source. As PostgreSQL continues to stand out as a platform for innovation, it’s now primed for intelligent applications and agents due to Microsoft’s continued support and service enhancements. Whether you’re a startup building your first AI feature or an enterprise modernizing mission-critical systems, Azure gives you the tools to move faster, build smarter, and scale confidently.
The future of intelligent applications will be written in Postgres, and we’re thrilled to build it together with you on Azure.
Start today
- Try the PostgreSQL extension for VS Code
- Learn how to build AI agents with Azure Database for PostgreSQL
1Most developers—more than 80%—now use AI tools in their workflow.
2PostgreSQL is chosen by 78.6% of developers that are building AI and real-time applications.