Microsoft is betting that the real edge in AI won’t come from the models themselves, but from the data, expertise, and context that only your organization holds. At the European Microsoft Fabric + SQL Community Conference in Barcelona on September 28, 2026, the company rolled out a batch of updates to Microsoft Fabric and Azure Databases aimed at keeping that proprietary knowledge at the center of an AI strategy.
The announcements, detailed in a blog post by Jessica Hawk, who leads Azure Product Marketing, and a companion post by Arun Ulagaratchagan, Executive Vice President of Azure Data, span governance, sharing, observability, application development, and database management. Several are already generally available, while others are still in preview.
Microsoft frames the whole effort around three elements working together: human ambition to set direction, intelligence grounded in an organization’s unique knowledge, and trust to operate at scale. The idea is a continuous learning loop where AI draws on your data, improves the systems it builds, and generates better outcomes over time — without locking you into any single model provider.
Here’s what changed across each area, and what it means for teams running data and AI on Microsoft’s unified platform.
#1 Fabric IQ: Ground Copilot in your governed business data
Fabric IQ brings governed business context directly into Microsoft Copilot, grounding answers in the Power BI semantic models, metrics, relationships, and business definitions an organization already trusts. The capability is now generally available in Copilot Chat and Cowork.
Users can ask everyday business questions — a sales forecast, a key performance indicator — and get answers tied to the same semantic model that powers the company’s reports. Cowork can then pull those insights into broader, multistep workflows, and integration with the new Code experience is coming through the Frontier program.
The thinking is straightforward: when someone asks Copilot for the latest sales forecast, the response should come from the same governed model that drives the team’s dashboards, using the same definitions everyone already agrees on. That reduces the endless back-and-forth about which number is actually correct.
In the blog post, Hawk describes using it herself while preparing for a sales review. She asked Copilot, “What’s our latest sales forecast?” and got an answer grounded in the same governed Power BI semantic model her team uses — so the meeting could start with what the numbers mean rather than arguing over whose figure was right.
For Power BI customers, this extends the semantic foundation they already own into Copilot while preserving existing access controls and governance. The feature is on by default in Copilot Chat and Cowork.
#2 IQ Sharing: Share business context without handing over control
Business knowledge rarely stays inside a single team, and organizations increasingly need to collaborate with customers, partners, and broader ecosystems. IQ Sharing in Fabric, now in preview as part of Fabric IQ, lets organizations share data and the business context that gives it meaning while maintaining governance over the underlying assets.
Starting with a set of key Fabric IQ artifacts and context, the feature is designed to grow beyond preview into something customers can use to discover, share, and activate trusted context wherever it’s needed.
Paired with OneLake mirroring and shortcuts, IQ Sharing is meant to create a more open foundation for sharing governed data and context across companies, platforms, and ecosystems — without organizations losing control of what they hand out.
#3 Observability: See system health before AI problems hit business outcomes
As more workloads move onto a unified data platform, teams need to understand system health and catch issues before they ripple into business and AI results. Observability in Fabric is meant to move teams from reactive troubleshooting to proactive operations.
Cross-workspace monitoring and an enhanced Monitor Hub give a unified view across jobs, capacities, workspaces, and workloads. Operations Agents and Activator then help teams investigate issues, pinpoint root causes with AI, and automate responses.
The goal is to keep oversight intact as data and AI scale, rather than discovering something is broken only after it affects a report or an automated workflow.
#4 Fabric Apps: Build applications directly on governed data
AI is reshaping how applications get built, but enterprises still want a secure, governed path from idea to production. Fabric Apps brings application development directly to governed data in Microsoft Fabric, so teams can build and scale AI-powered business applications faster.
New capabilities cover data connectivity, transactional workloads, backend logic, storage, and policy-controlled access. Developers can move from prototype to production on a single data foundation, bringing app creation closer to where enterprise data and insights already live.
The intent is to let more people turn data into action without stepping outside the governed environment, shortening the distance between a raw dataset and a working application.
#5 Agentic data engineering: Automate the work, keep humans in control
A continuous learning loop is only as strong as the data behind it, and that data has to be prepared, refined, and improved constantly. As those environments get more complex, organizations want automation that takes on more of the work without pushing people or controls out of the loop.
Microsoft first shared its vision for autonomous data engineering earlier this year, tying it to its acquisition of Osmos to accelerate that work. New agentic data engineering features in Fabric bring that vision to life, adding autonomous execution to complex data engineering initiatives while keeping organizations in control.
The model is that engineers define the outcome and set the boundaries. Within those limits, the agent plans and executes the work, validates the results, and refines the approach — rather than running completely on its own.
#6 SQL Server on Azure Local: Keep critical workloads where you need them
Now generally available, SQL Server on Azure Local brings SQL Server and Azure services into local environments, giving organizations more choice to run workloads closer to their applications and operations.
A preview of SQL Server on Azure Local with disconnected operations extends that flexibility to environments where cloud connectivity is interrupted, restricted, or simply unavailable — think regulated, edge, or remote sites that can’t rely on a constant link to the cloud.
Together, these options give organizations operating across regulated, local, edge, and disconnected environments greater control over where their critical data and workloads reside and run.
#7 Database Hub in Fabric: Central database management with agentic help
Building on its introduction at FabCon Atlanta, Database Hub in Fabric is now in public preview. It provides a central control plane for managing SQL Server, Azure SQL, PostgreSQL, Cosmos DB, and SQL databases in Fabric, helping administrators monitor and govern their database estate.
Complementing that, specialist database agents for SQL and PostgreSQL — available in Database Hub in Fabric and Visual Studio Code, coming soon to public preview — help teams investigate issues, understand performance bottlenecks, and spot optimization opportunities right inside their development environment.
The aim is to give teams a clearer picture of their database estate and support more informed operational decisions as applications lean harder on operational data.
What this means for you
If you’re a Power BI or Fabric customer, the most immediate change is that Copilot can now answer business questions using the same governed data your dashboards already rely on — no extra setup, since it’s on by default in Copilot Chat and Cowork. That could cut down on the “whose number is right” debates that slow down reviews.
For organizations that share data externally, IQ Sharing offers a governed way to collaborate without ceding control, though it’s still in preview. Meanwhile, the agentic data engineering and Database Hub features are aimed at teams managing larger, more complex data estates who want automation without losing oversight.
The through-line across all of this is that Microsoft wants its data platform to be the foundation for AI — one where your proprietary context gives you an edge that generic models can’t replicate, and where you stay in control as AI scales. The company says it will broaden this story across the full Microsoft Frontier ecosystem at Ignite, connecting data, applications, agents, governance, and infrastructure into one system.
How to get it
Fabric IQ is generally available now in Copilot Chat and Cowork, and SQL Server on Azure Local is generally available as well. IQ Sharing, Observability, Fabric Apps, agentic data engineering, and Database Hub are available in preview or rolling out, depending on the capability.
To try the generally available features, check your Fabric tenant and Copilot settings. For preview capabilities, you’ll need to opt in through the Fabric preview experience. Microsoft points readers to a companion blog post by Arun Ulagaratchagan, Executive Vice President of Azure Data, for the complete set of announcements.
Source: The Official Microsoft Blog
Over to you: Which of these Fabric updates — Copilot’s new business context, IQ Sharing, or agentic data engineering — would change your day-to-day work the most?
