The Microsoft Fabric Blog unveils Fabric IQ, highlighting how its Ontology feature provides enterprises with a semantic layer that connects data, meaning, and actions for reliable, governed, and actionable AI integration.

Fabric IQ: The Semantic Foundation for Enterprise AI

Microsoft Fabric Blog introduces Fabric IQ, a new semantic foundation in Microsoft Fabric built to unify data, business context, and actions for AI-driven enterprises. Fabric IQ is not a replacement for existing data estates, but a multiplier that bridges previously fragmented data semantics, enabling consistent understanding and operational reliability for AI agents and business users.

What is Ontology in Fabric IQ?

Ontology forms the semantic backbone that binds entities, processes, systems, actions, rules, and data within an organization. Through ontology, raw tables and events are transformed into meaningful business entities and relationships, supporting business logic, lineage, and policy. This unified framework equips applications and AI agents to reason accurately and act with confidence across the enterprise.

Key Benefits

  • Semantic foundation: Offers shared understanding for business users, engineers, and AI agents, including models, relationships, rules, and actionable insights.
  • Reuse of semantic investments: Enables reuse of Power BI semantic models and makes core definitions universally available.
  • Enterprise AI grounding: Provides AI with a semantic framework for consistent, explainable, business-aligned decisions.
  • Decision-ready AI actions: Ontology embeds business rules and constraints to support safe, auditable, automated actions.
  • Governance and trust: Centralizes semantics to reduce drift and duplication, strengthening data quality and compliance.
  • Cross-domain reasoning: Enables navigation and explanation of outcomes across portfolio domains using graph links and relationships.

ENMAX Power reports successful application of ontology in Fabric IQ to unifying grid data, optimizing grid operations, and democratizing data access for field teams, further highlighting operational and forecasting improvements.

Key Capabilities

  • Automated Ontology Generation: Converts existing BI semantic models and schemas into an operational ontology graph, extending current investments to operational contexts.
  • Ontology Modeling and Management: Supports low-code tools for defining and managing business entities and workflows in line with real-world processes.
  • Live Data Binding: Unifies analytical, operational, time-series, and geospatial data for consistent business insights and AI interaction.
  • Business Logic and Actions: Encodes rules and constraints for alerts, actions, workflows, and updates, thus enabling automated operations.
  • Managed Ontology Graph: Offers a queryable, automatically updated ontology graph for exploring dependencies and operational impacts.
  • AI-ready Semantic Layer: Powers AI agents (Data Agents, Operations Agents, Foundry IQ) with real-time, business-grounded semantics to deliver explainable insights and autonomous operations.

Powering AI Agents with Real-Time Business Context

Fabric IQ ontology lets AI agents interact with business entities and relationships rather than raw tables, supporting accurate, guardrail-driven answers and decision-making. Ontology abstractions simplify complex, multi-source data while supporting consistent, reliable outcomes as enterprise data evolves.

Kyndryl utilizes Fabric IQ’s ontology for agentic AI, enhancing governance, security, and live operational context for agents in production.

Data Agent

Enables conversational Q&A on enterprise data, extracting context using ontology rather than schemas. Joins and queries data across semantic models and data lakes seamlessly for improved accuracy and responsiveness.

Operations Agent

Monitors live conditions, evaluates trade-offs, and triggers business actions using ontology-driven logic, enabling automated operational responses and continuous improvement.

Foundry IQ Agent

Developers can build custom agents bridging both structured (from semantic models, lakehouses) and unstructured data (SharePoint, OneDrive), using ontology to deliver grounded, natural-language answers.

Ontology in Fabric IQ and Unified Semantics

Ontology is key to enabling fast, confident decisions, reducing operational and compliance risk, and maximizing ROI on current data and AI assets, all via a centralized semantic layer. It leverages low-code modeling and automated generation from existing definitions to power consistent, explainable, and business-aligned agent outcomes.

Getting Started

Explore further documentation, submit ideas, or jumpstart your first ontology for enterprise semantic AI with Fabric IQ.

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