How to Set Up Azure OpenAI
Azure OpenAI gives you access to OpenAI models hosted in your own Azure tenant. This guide covers both authentication methods.
Prerequisites
Section titled “Prerequisites”- An Azure subscription with Azure OpenAI Service enabled
- A deployed model (e.g., GPT-4o, GPT-4 Turbo) in your Azure OpenAI resource
- The endpoint URL and deployment name from the Azure portal
Configure with API key
Section titled “Configure with API key”- Open Settings > Azure OpenAI in Daneel.
- Enter your Endpoint URL (e.g.,
https://your-resource.openai.azure.com/). - Enter your Deployment name (the name you gave your model deployment).
- Select API Key as the auth method.
- Paste your Azure API key.
- Click Save.
Switch the provider dropdown in the chat panel to Azure OpenAI to start using it.
Configure with Entra ID (OAuth2)
Section titled “Configure with Entra ID (OAuth2)”For environments that require Azure Active Directory authentication:
- Open Settings > Azure OpenAI in Daneel.
- Enter your Endpoint URL and Deployment name.
- Select Entra ID as the auth method.
- Daneel initiates an OAuth2 flow via Chrome’s identity API.
- Sign in with your Microsoft account and consent to the required permissions.
Daneel handles token refresh automatically.
Tool calling
Section titled “Tool calling”Azure OpenAI supports MCP tool calling using the OpenAI function calling format. Once configured, connected MCP servers work the same as with Claude or Ollama.
Next steps
Section titled “Next steps”- Connect MCP servers to give Azure OpenAI access to external tools
- See the AI Providers reference for a comparison of all backends
- Read about the provider spectrum to understand trade-offs