Add Azure OpenAI Custom Model Integration (#1001)

Fixes #710 

This PR implements comprehensive Azure OpenAI integration for Dyad,
enabling users to leverage Azure
OpenAI models through proper environment variable configuration. The
implementation adds Azure as a
supported provider with full integration into the existing language
model architecture, including support
  for GPT-5 models. Key features include environment-based
configuration using `AZURE_API_KEY` and `AZURE_RESOURCE_NAME`,
specialized UI components that provide clear
setup instructions and status indicators, and seamless integration with
Dyad's existing provider system.
The Azure provider leverages the @ai-sdk/azure package (v1.3.25) for
compatibility with the current
  TypeScript language model interfaces.

The implementation includes robust error handling for missing
configuration, comprehensive test coverage
with 9 new unit tests covering critical functionality like model client
creation and error scenarios, and
  an E2E test for the Azure-specific settings UI. 

<img width="1510" height="908" alt="Screenshot 2025-08-18 at 9 14 32 PM"
src="https://github.com/user-attachments/assets/04aa99e1-1590-4bb0-86c9-a67b97bc7500"
/>

---------

Co-authored-by: graphite-app[bot] <96075541+graphite-app[bot]@users.noreply.github.com>
Co-authored-by: Will Chen <willchen90@gmail.com>

e2e-tests/azure_provider_settings.spec.ts

@@ -0,0 +1,43 @@
+import { expect } from "@playwright/test";
+import { test as testWithPo } from "./helpers/test_helper";
+
+testWithPo("Azure provider settings UI", async ({ po }) => {
+  await po.setUp();
+  await po.goToSettingsTab();
+
+  // Look for Azure OpenAI in the provider list
+  await expect(po.page.getByText("Azure OpenAI")).toBeVisible();
+
+  // Navigate to Azure provider settings
+  await po.page.getByText("Azure OpenAI").click();
+
+  // Wait for Azure settings page to load
+  await po.page.waitForSelector('h1:has-text("Configure Azure OpenAI")', {
+    state: "visible",
+    timeout: 5000,
+  });
+
+  // Check that Azure-specific UI is displayed
+  await expect(po.page.getByText("Azure OpenAI Configuration")).toBeVisible();
+  await expect(po.page.getByText("AZURE_API_KEY")).toBeVisible();
+  await expect(po.page.getByText("AZURE_RESOURCE_NAME")).toBeVisible();
+
+  // Check environment variable status indicators exist
+  await expect(
+    po.page.getByText("Environment Variables Configuration"),
+  ).toBeVisible();
+
+  // Check setup instructions are present
+  await expect(po.page.getByText("How to configure:")).toBeVisible();
+  await expect(
+    po.page.getByText("Get your API key from the Azure portal"),
+  ).toBeVisible();
+  await expect(po.page.getByText("Find your resource name")).toBeVisible();
+  await expect(
+    po.page.getByText("Set these environment variables before starting Dyad"),
+  ).toBeVisible();
+
+  // Check that status indicators show "Not Set" (since no env vars are configured in test)
+  const statusElements = po.page.locator(".bg-red-100, .bg-red-800\\/20");
+  await expect(statusElements.first()).toBeVisible();
+});

e2e-tests/azure_send_message.spec.ts

@@ -0,0 +1,20 @@
+import { testSkipIfWindows } from "./helpers/test_helper";
+
+// Set environment variables before the test runs to enable Azure testing
+process.env.TEST_AZURE_BASE_URL = "http://localhost:3500/azure";
+process.env.AZURE_API_KEY = "fake-azure-key-for-testing";
+process.env.AZURE_RESOURCE_NAME = "fake-resource-for-testing";
+
+testSkipIfWindows("send message through Azure OpenAI", async ({ po }) => {
+  // Set up Azure without test provider
+  await po.setUpAzure();
+
+  // Select Azure model
+  await po.selectTestAzureModel();
+
+  // Send a test prompt that returns a normal conversational response
+  await po.sendPrompt("tc=basic");
+
+  // Verify we get a response (this means Azure integration is working)
+  await po.snapshotMessages();
+});

e2e-tests/fixtures/azure/basic.md

@@ -0,0 +1 @@
+This is a simple basic response

e2e-tests/helpers/test_helper.ts

@@ -673,7 +673,7 @@ export class PageObject {
 
   async selectModel({ provider, model }: { provider: string; model: string }) {
     await this.page.getByRole("button", { name: "Model: Auto" }).click();
-    await this.page.getByText(provider).click();
+    await this.page.getByText(provider, { exact: true }).click();
     await this.page.getByText(model, { exact: true }).click();
   }
 
@@ -701,6 +701,23 @@ export class PageObject {
       .click();
   }
 
+  async selectTestAzureModel() {
+    await this.page.getByRole("button", { name: "Model: Auto" }).click();
+    await this.page.getByText("Azure OpenAI", { exact: true }).click();
+    await this.page.getByText("GPT-5", { exact: true }).click();
+  }
+
+  async setUpAzure({ autoApprove = false }: { autoApprove?: boolean } = {}) {
+    await this.githubConnector.clearPushEvents();
+    await this.goToSettingsTab();
+    if (autoApprove) {
+      await this.toggleAutoApprove();
+    }
+    // Azure should already be configured via environment variables
+    // so we don't need additional setup steps like setUpDyadProvider
+    await this.goToAppsTab();
+  }
+
   async setUpTestProvider() {
     await this.page.getByText("Add custom providerConnect to").click();
     // Fill out provider dialog

e2e-tests/snapshots/azure_send_message.spec.ts_send-message-through-Azure-OpenAI-1.aria.yml

@@ -0,0 +1,6 @@
+- paragraph: tc=basic
+- paragraph: This is a simple basic response
+- img
+- text: less than a minute ago
+- button "Retry":
+  - img

package-lock.json

@@ -10,8 +10,9 @@
       "license": "MIT",
       "dependencies": {
         "@ai-sdk/anthropic": "^2.0.4",
+        "@ai-sdk/azure": "^2.0.17",
         "@ai-sdk/google": "^2.0.6",
-        "@ai-sdk/openai": "^2.0.15",
+        "@ai-sdk/openai": "2.0.15",
         "@ai-sdk/openai-compatible": "^1.0.8",
         "@ai-sdk/provider-utils": "^3.0.3",
         "@biomejs/biome": "^1.9.4",
@@ -142,6 +143,57 @@
         "zod": "^3.25.76 || ^4"
       }
     },
+    "node_modules/@ai-sdk/azure": {
+      "version": "2.0.17",
+      "resolved": "https://registry.npmjs.org/@ai-sdk/azure/-/azure-2.0.17.tgz",
+      "integrity": "sha512-ZyUsN2lR61VdBhnFKyoRLJxJfB6NY7MavZFLec5kyuvF6+JeXNyzJhriZP0E7lVbJe9JSqU8LAnKCDhG5gfL3Q==",
+      "license": "Apache-2.0",
+      "dependencies": {
+        "@ai-sdk/openai": "2.0.17",
+        "@ai-sdk/provider": "2.0.0",
+        "@ai-sdk/provider-utils": "3.0.4"
+      },
+      "engines": {
+        "node": ">=18"
+      },
+      "peerDependencies": {
+        "zod": "^3.25.76 || ^4"
+      }
+    },
+    "node_modules/@ai-sdk/azure/node_modules/@ai-sdk/openai": {
+      "version": "2.0.17",
+      "resolved": "https://registry.npmjs.org/@ai-sdk/openai/-/openai-2.0.17.tgz",
+      "integrity": "sha512-nt0Dvn3etQJwzJtS6XEUchZkDb3NAjn8yTmLZj1fF+F2pyUbiwKg4joW9kjsrDhcwOxdoQ26OyONsVLE9AWfMw==",
+      "license": "Apache-2.0",
+      "dependencies": {
+        "@ai-sdk/provider": "2.0.0",
+        "@ai-sdk/provider-utils": "3.0.4"
+      },
+      "engines": {
+        "node": ">=18"
+      },
+      "peerDependencies": {
+        "zod": "^3.25.76 || ^4"
+      }
+    },
+    "node_modules/@ai-sdk/azure/node_modules/@ai-sdk/provider-utils": {
+      "version": "3.0.4",
+      "resolved": "https://registry.npmjs.org/@ai-sdk/provider-utils/-/provider-utils-3.0.4.tgz",
+      "integrity": "sha512-/3Z6lfUp8r+ewFd9yzHkCmPlMOJUXup2Sx3aoUyrdXLhOmAfHRl6Z4lDbIdV0uvw/QYoBcVLJnvXN7ncYeS3uQ==",
+      "license": "Apache-2.0",
+      "dependencies": {
+        "@ai-sdk/provider": "2.0.0",
+        "@standard-schema/spec": "^1.0.0",
+        "eventsource-parser": "^3.0.3",
+        "zod-to-json-schema": "^3.24.1"
+      },
+      "engines": {
+        "node": ">=18"
+      },
+      "peerDependencies": {
+        "zod": "^3.25.76 || ^4"
+      }
+    },
     "node_modules/@ai-sdk/gateway": {
       "version": "1.0.7",
       "resolved": "https://registry.npmjs.org/@ai-sdk/gateway/-/gateway-1.0.7.tgz",

package.json

@@ -85,8 +85,9 @@
   },
   "dependencies": {
     "@ai-sdk/anthropic": "^2.0.4",
+    "@ai-sdk/azure": "^2.0.17",
     "@ai-sdk/google": "^2.0.6",
-    "@ai-sdk/openai": "^2.0.15",
+    "@ai-sdk/openai": "2.0.15",
     "@ai-sdk/openai-compatible": "^1.0.8",
     "@ai-sdk/provider-utils": "^3.0.3",
     "@biomejs/biome": "^1.9.4",

src/components/settings/ApiKeyConfiguration.tsx

@@ -6,6 +6,7 @@ import {
   AccordionItem,
   AccordionTrigger,
 } from "@/components/ui/accordion";
+import { AzureConfiguration } from "./AzureConfiguration";
 import { Input } from "@/components/ui/input";
 import { Button } from "@/components/ui/button";
 import { UserSettings } from "@/lib/schemas";
@@ -46,6 +47,11 @@ export function ApiKeyConfiguration({
   onDeleteKey,
   isDyad,
 }: ApiKeyConfigurationProps) {
+  // Special handling for Azure OpenAI which requires environment variables
+  if (provider === "azure") {
+    return <AzureConfiguration envVars={envVars} />;
+  }
+
   const envApiKey = envVarName ? envVars[envVarName] : undefined;
   const userApiKey = settings?.providerSettings?.[provider]?.apiKey?.value;
 

src/components/settings/AzureConfiguration.tsx

@@ -0,0 +1,119 @@
+import { Alert, AlertDescription, AlertTitle } from "@/components/ui/alert";
+import {
+  Accordion,
+  AccordionContent,
+  AccordionItem,
+  AccordionTrigger,
+} from "@/components/ui/accordion";
+import { Info, KeyRound } from "lucide-react";
+
+interface AzureConfigurationProps {
+  envVars: Record<string, string | undefined>;
+}
+
+export function AzureConfiguration({ envVars }: AzureConfigurationProps) {
+  const azureApiKey = envVars["AZURE_API_KEY"];
+  const azureResourceName = envVars["AZURE_RESOURCE_NAME"];
+
+  const isAzureConfigured = !!(azureApiKey && azureResourceName);
+
+  return (
+    <div className="space-y-4">
+      <Alert
+        variant={isAzureConfigured ? "default" : "destructive"}
+        className={
+          isAzureConfigured
+            ? ""
+            : "border-red-200 bg-red-100 dark:border-red-800/50 dark:bg-red-800/20"
+        }
+      >
+        <Info
+          className={`h-4 w-4 ${isAzureConfigured ? "" : "text-red-800 dark:text-red-400"}`}
+        />
+        <AlertTitle
+          className={isAzureConfigured ? "" : "text-red-800 dark:text-red-400"}
+        >
+          Azure OpenAI Configuration
+        </AlertTitle>
+        <AlertDescription
+          className={isAzureConfigured ? "" : "text-red-800 dark:text-red-400"}
+        >
+          Azure OpenAI requires both an API key and resource name to be
+          configured via environment variables.
+        </AlertDescription>
+      </Alert>
+
+      <Accordion
+        type="multiple"
+        className="w-full space-y-4"
+        defaultValue={["azure-config"]}
+      >
+        <AccordionItem
+          value="azure-config"
+          className="border rounded-lg px-4 bg-background"
+        >
+          <AccordionTrigger className="text-lg font-medium hover:no-underline cursor-pointer">
+            Environment Variables Configuration
+          </AccordionTrigger>
+          <AccordionContent className="pt-4">
+            <div className="space-y-4">
+              <div>
+                <h4 className="font-medium mb-2">
+                  Required Environment Variables:
+                </h4>
+                <div className="space-y-3 text-sm">
+                  <div className="flex justify-between items-center p-3 bg-muted rounded border">
+                    <code className="font-mono text-foreground">
+                      AZURE_API_KEY
+                    </code>
+                    <span
+                      className={`px-2 py-1 rounded text-xs font-medium ${azureApiKey ? "bg-green-100 text-green-800 dark:bg-green-800/20 dark:text-green-400" : "bg-red-100 text-red-800 dark:bg-red-800/20 dark:text-red-400"}`}
+                    >
+                      {azureApiKey ? "Set" : "Not Set"}
+                    </span>
+                  </div>
+                  <div className="flex justify-between items-center p-3 bg-muted rounded border">
+                    <code className="font-mono text-foreground">
+                      AZURE_RESOURCE_NAME
+                    </code>
+                    <span
+                      className={`px-2 py-1 rounded text-xs font-medium ${azureResourceName ? "bg-green-100 text-green-800 dark:bg-green-800/20 dark:text-green-400" : "bg-red-100 text-red-800 dark:bg-red-800/20 dark:text-red-400"}`}
+                    >
+                      {azureResourceName ? "Set" : "Not Set"}
+                    </span>
+                  </div>
+                </div>
+              </div>
+
+              <div className="mt-4 p-4 bg-blue-50 dark:bg-blue-950/30 rounded border border-blue-200 dark:border-blue-700">
+                <h5 className="font-medium mb-2 text-blue-900 dark:text-blue-200">
+                  How to configure:
+                </h5>
+                <ol className="list-decimal list-inside space-y-1 text-sm text-blue-800 dark:text-blue-300">
+                  <li>Get your API key from the Azure portal</li>
+                  <li>
+                    Find your resource name (the name you gave your Azure OpenAI
+                    resource)
+                  </li>
+                  <li>Set these environment variables before starting Dyad</li>
+                  <li>Restart Dyad after setting the environment variables</li>
+                </ol>
+              </div>
+
+              {isAzureConfigured && (
+                <Alert>
+                  <KeyRound className="h-4 w-4" />
+                  <AlertTitle>Azure OpenAI Configured</AlertTitle>
+                  <AlertDescription>
+                    Both required environment variables are set. You can now use
+                    Azure OpenAI models.
+                  </AlertDescription>
+                </Alert>
+              )}
+            </div>
+          </AccordionContent>
+        </AccordionItem>
+      </Accordion>
+    </div>
+  );
+}

src/components/settings/ProviderSettingsPage.tsx

@@ -69,7 +69,14 @@ export function ProviderSettingsPage({ provider }: ProviderSettingsPageProps) {
     userApiKey !== "Not Set";
   const hasEnvKey = !!(envVarName && envVars[envVarName]);
 
-  const isConfigured = isValidUserKey || hasEnvKey; // Configured if either is set
+  // Special handling for Azure OpenAI configuration
+  const isAzureConfigured =
+    provider === "azure"
+      ? !!(envVars["AZURE_API_KEY"] && envVars["AZURE_RESOURCE_NAME"])
+      : false;
+
+  const isConfigured =
+    provider === "azure" ? isAzureConfigured : isValidUserKey || hasEnvKey; // Configured if either is set
 
   // --- Save Handler ---
   const handleSaveKey = async () => {

src/ipc/shared/language_model_helpers.ts

@@ -211,6 +211,40 @@ export const MODEL_OPTIONS: Record<string, ModelOption[]> = {
       temperature: 0,
     },
   ],
+  azure: [
+    {
+      name: "gpt-5",
+      displayName: "GPT-5",
+      description: "Azure OpenAI GPT-5 model with reasoning capabilities",
+      maxOutputTokens: 128_000,
+      contextWindow: 400_000,
+      temperature: 0,
+    },
+    {
+      name: "gpt-5-mini",
+      displayName: "GPT-5 Mini",
+      description: "Azure OpenAI GPT-5 Mini model",
+      maxOutputTokens: 128_000,
+      contextWindow: 400_000,
+      temperature: 0,
+    },
+    {
+      name: "gpt-5-nano",
+      displayName: "GPT-5 Nano",
+      description: "Azure OpenAI GPT-5 Nano model",
+      maxOutputTokens: 128_000,
+      contextWindow: 400_000,
+      temperature: 0,
+    },
+    {
+      name: "gpt-5-chat",
+      displayName: "GPT-5 Chat",
+      description: "Azure OpenAI GPT-5 Chat model",
+      maxOutputTokens: 16_384,
+      contextWindow: 128_000,
+      temperature: 0,
+    },
+  ],
 };
 
 export const PROVIDER_TO_ENV_VAR: Record<string, string> = {
@@ -218,6 +252,7 @@ export const PROVIDER_TO_ENV_VAR: Record<string, string> = {
   anthropic: "ANTHROPIC_API_KEY",
   google: "GEMINI_API_KEY",
   openrouter: "OPENROUTER_API_KEY",
+  azure: "AZURE_API_KEY",
 };
 
 export const CLOUD_PROVIDERS: Record<
@@ -258,6 +293,12 @@ export const CLOUD_PROVIDERS: Record<
     websiteUrl: "https://academy.dyad.sh/settings",
     gatewayPrefix: "dyad/",
   },
+  azure: {
+    displayName: "Azure OpenAI",
+    hasFreeTier: false,
+    websiteUrl: "https://portal.azure.com/",
+    gatewayPrefix: "",
+  },
 };
 
 const LOCAL_PROVIDERS: Record<

src/ipc/utils/get_model_client.ts

@@ -1,6 +1,7 @@
 import { createOpenAI } from "@ai-sdk/openai";
 import { createGoogleGenerativeAI as createGoogle } from "@ai-sdk/google";
 import { createAnthropic } from "@ai-sdk/anthropic";
+import { azure } from "@ai-sdk/azure";
 import { createOpenRouter } from "@openrouter/ai-sdk-provider";
 import { createOpenAICompatible } from "@ai-sdk/openai-compatible";
 import type { LargeLanguageModel, UserSettings } from "../../lib/schemas";
@@ -224,6 +225,54 @@ function getRegularModelClient(
         backupModelClients: [],
       };
     }
+    case "azure": {
+      // Check if we're in e2e testing mode
+      const testAzureBaseUrl = getEnvVar("TEST_AZURE_BASE_URL");
+
+      if (testAzureBaseUrl) {
+        // Use fake server for e2e testing
+        logger.info(`Using test Azure base URL: ${testAzureBaseUrl}`);
+        const provider = createOpenAICompatible({
+          name: "azure-test",
+          baseURL: testAzureBaseUrl,
+          apiKey: "fake-api-key-for-testing",
+        });
+        return {
+          modelClient: {
+            model: provider(model.name),
+            builtinProviderId: providerId,
+          },
+          backupModelClients: [],
+        };
+      }
+
+      // Azure OpenAI requires both API key and resource name as env vars
+      // We use environment variables for Azure configuration
+      const resourceName = getEnvVar("AZURE_RESOURCE_NAME");
+      const azureApiKey = getEnvVar("AZURE_API_KEY");
+
+      if (!resourceName) {
+        throw new Error(
+          "Azure OpenAI resource name is required. Please set the AZURE_RESOURCE_NAME environment variable.",
+        );
+      }
+
+      if (!azureApiKey) {
+        throw new Error(
+          "Azure OpenAI API key is required. Please set the AZURE_API_KEY environment variable.",
+        );
+      }
+
+      // Use the default Azure provider with environment variables
+      // The azure provider automatically picks up AZURE_RESOURCE_NAME and AZURE_API_KEY
+      return {
+        modelClient: {
+          model: azure(model.name),
+          builtinProviderId: providerId,
+        },
+        backupModelClients: [],
+      };
+    }
     case "ollama": {
       const provider = createOllamaProvider({ baseURL: getOllamaApiUrl() });
       return {

src/lib/schemas.ts

@@ -34,6 +34,7 @@ const providers = [
   "openrouter",
   "ollama",
   "lmstudio",
+  "azure",
 ] as const;
 
 export const cloudProviders = providers.filter(

testing/fake-llm-server/index.ts

@@ -137,13 +137,20 @@ app.get("/lmstudio/api/v0/models", (req, res) => {
   res.json(lmStudioModels);
 });
 
-["lmstudio", "gateway", "engine", "ollama"].forEach((provider) => {
+["lmstudio", "gateway", "engine", "ollama", "azure"].forEach((provider) => {
   app.post(
     `/${provider}/v1/chat/completions`,
     createChatCompletionHandler(provider),
   );
 });
 
+// Azure-specific endpoints (Azure client uses different URL patterns)
+app.post("/azure/chat/completions", createChatCompletionHandler("azure"));
+app.post(
+  "/azure/openai/deployments/:deploymentId/chat/completions",
+  createChatCompletionHandler("azure"),
+);
+
 // Default test provider handler:
 app.post("/v1/chat/completions", createChatCompletionHandler("."));