Instiq
Chapter 4 · Building AI Agents·v1.1.0·Updated 6/11/2026·~13 min

What's changed: Added per-section figures (cert-figure-retrofit). New AI-901 Chapter 4 (Domain 2: agent definition = goal→autonomous plan→tool execution→loop, building blocks = instructions/model/knowledge/tools, function calling, difference from generative AI, Foundry Agent Service, multi-agent, safety = least privilege/human-in-the-loop/Content Safety)

4.1What Is an AI Agent

Key points

Understand that agentic AI extends generative AI with autonomous goal-directed planning, tool use, and multi-step execution; learn how it differs from simple generative AI, the building blocks (tools/function calling, knowledge, actions), and when agents fit.

An AI agent is a "reason-then-act" AI that, given a goal, autonomously plans steps, calls the tools it needs, executes, observes the result, and decides the next move. Whereas simple generative AI "returns one piece of text per input," an agent loops through multiple steps until the goal is met—the decisive difference. For "arrange next week’s business trip," an agent autonomously checks availability, books, and sends a confirmation email using tools.

4.1.1The building blocks of an agent

  • Instructions: the agent’s purpose, role, and constraints (akin to a system message).
  • Model: the LLM that does the reasoning and text generation (deployed in Foundry).
  • Knowledge: the information sources it references (e.g., internal docs); supplied via grounding/RAG.
  • Tools / actions: the external functions the agent can call (function calling, APIs, search); the ability to act is the essence of an agent.

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