When AI Agents Fail: Engineering Reliable Recovery with Microsoft Foundry

Introduction: The Failure That Demos Do Not Show A user asks an AI agent a simple question: "Create a procurement request for 10 laptops for the new project team." The agent does what it was designed to do. It checks the procurement policy. It verifies budget availability. It calls the procurement system. The procurement system successfully creates request PR-10482 . Then the network drops. The response from the procurement system never reaches the agent. From the agent’s perspective, the tool call timed out. It does not know whether the operation succeeded, failed, or reached the downstream s