diff --git a/infra/abbreviations.json b/infra/abbreviations.json
index 93b9565..9d232cc 100644
--- a/infra/abbreviations.json
+++ b/infra/abbreviations.json
@@ -2,6 +2,8 @@
     "ai": {
       "aiSearch": "srch-",
       "aiServices": "aisa-",
+      "aiFoundry": "aif-",
+      "aiFoundryProject": "aifp-",
       "aiVideoIndexer": "avi-",
       "machineLearningWorkspace": "mlw-",
       "openAIService": "oai-",
diff --git a/infra/deploy_ai_foundry.bicep b/infra/deploy_ai_foundry.bicep
index 604966b..740df33 100644
--- a/infra/deploy_ai_foundry.bicep
+++ b/infra/deploy_ai_foundry.bicep
@@ -11,7 +11,9 @@ param managedIdentityObjectId string
 param aiServicesEndpoint string
 param aiServicesKey string
 param aiServicesId string
+param aureaiFoundryEndpoint string
 
+param aiFoundryName string
 param existingLogAnalyticsWorkspaceId string = ''
 
 var useExisting = !empty(existingLogAnalyticsWorkspaceId)
@@ -24,15 +26,10 @@ var abbrs = loadJsonContent('./abbreviations.json')
 var storageName = '${abbrs.storage.storageAccount}${solutionName}'
 
 var storageSkuName = 'Standard_LRS'
-var aiServicesName = '${abbrs.ai.aiServices}${solutionName}'
 var workspaceName = '${abbrs.managementGovernance.logAnalyticsWorkspace}${solutionName}'
 var keyvaultName = '${abbrs.security.keyVault}${solutionName}'
 var location = solutionLocation 
-var azureAiHubName = '${abbrs.ai.aiHub}${solutionName}'
-var aiHubFriendlyName = azureAiHubName
-var aiHubDescription = 'AI Hub for KM template'
-var aiProjectName = '${abbrs.ai.aiHubProject}${solutionName}'
-var aiProjectFriendlyName = aiProjectName
+
 var aiSearchName = '${solutionName}-search'
 var applicationInsightsName = '${solutionName}-appi'
 
@@ -73,125 +70,6 @@ resource applicationInsights 'Microsoft.Insights/components@2020-02-02' = {
 
 var storageNameCleaned = replace(replace(replace(replace('${storageName}cast', '-', ''), '_', ''), '.', ''),'/', '')
 
-
-
-
-resource storage 'Microsoft.Storage/storageAccounts@2022-09-01' = {
-  name: storageNameCleaned
-  location: location
-  sku: {
-    name: storageSkuName
-  }
-  kind: 'StorageV2'
-  identity: {
-    type: 'SystemAssigned'
-  }
-  properties: {
-    accessTier: 'Hot'
-    allowBlobPublicAccess: false
-    allowCrossTenantReplication: false
-    allowSharedKeyAccess: false
-    encryption: {
-      keySource: 'Microsoft.Storage'
-      requireInfrastructureEncryption: false
-      services: {
-        blob: {
-          enabled: true
-          keyType: 'Account'
-        }
-        file: {
-          enabled: true
-          keyType: 'Account'
-        }
-        queue: {
-          enabled: true
-          keyType: 'Service'
-        }
-        table: {
-          enabled: true
-          keyType: 'Service'
-        }
-      }
-    }
-    isHnsEnabled: false
-    isNfsV3Enabled: false
-    keyPolicy: {
-      keyExpirationPeriodInDays: 7
-    }
-    largeFileSharesState: 'Disabled'
-    minimumTlsVersion: 'TLS1_2'
-    networkAcls: {
-      bypass: 'AzureServices'
-      defaultAction: 'Allow'
-    }
-    supportsHttpsTrafficOnly: true
-  }
-}
-
-@description('This is the built-in Storage Blob Data Contributor.')
-resource blobDataContributor 'Microsoft.Authorization/roleDefinitions@2018-01-01-preview' existing = {
-  scope: subscription()
-  name: 'ba92f5b4-2d11-453d-a403-e96b0029c9fe'
-}
-
-resource storageroleAssignment 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
-  name: guid(resourceGroup().id, managedIdentityObjectId, blobDataContributor.id)
-  scope: storage
-  properties: {
-    principalId: managedIdentityObjectId
-    roleDefinitionId: blobDataContributor.id
-    principalType: 'ServicePrincipal'
-  }
-}
-
-resource aiHub 'Microsoft.MachineLearningServices/workspaces@2023-08-01-preview' = {
-  name: azureAiHubName
-  location: location
-  identity: {
-    type: 'SystemAssigned'
-  }
-  properties: {
-    // organization
-    friendlyName: aiHubFriendlyName
-    description: aiHubDescription
-
-    // dependent resources
-    keyVault: keyVault.id
-    storageAccount: storage.id
-  }
-  kind: 'hub'
-
-  resource aiServicesConnection 'connections@2024-07-01-preview' = {
-    name: '${azureAiHubName}-connection-AzureOpenAI'
-    properties: {
-      category: 'AIServices'
-      target: aiServicesEndpoint
-      authType: 'ApiKey'
-      isSharedToAll: true
-      credentials: {
-        key: aiServicesKey
-      }
-      metadata: {
-        ApiType: 'Azure'
-        ResourceId: aiServicesId
-      }
-    }
-  }
-}
-
-resource aiHubProject 'Microsoft.MachineLearningServices/workspaces@2024-01-01-preview' = {
-  name: aiProjectName
-  location: location
-  kind: 'Project'
-  identity: {
-    type: 'SystemAssigned'
-  }
-  properties: {
-    friendlyName: aiProjectFriendlyName
-    hubResourceId: aiHub.id
-  }
-}
-
 resource tenantIdEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-preview' = {
   parent: keyVault
   name: 'TENANT-ID'
@@ -248,11 +126,11 @@ resource azureOpenAIEndpointEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-
   }
 }
 
-resource azureAIProjectConnectionStringEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-preview' = {
+resource azureAIProjectEndpointEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-preview' = {
   parent: keyVault
-  name: 'AZURE-AI-PROJECT-CONN-STRING'
+  name: 'AI-PROJECT-ENDPOINT'
   properties: {
-    value: '${split(aiHubProject.properties.discoveryUrl, '/')[2]};${subscription().subscriptionId};${resourceGroup().name};${aiHubProject.name}'
+    value: aureaiFoundryEndpoint
   }
 }
 
@@ -292,7 +170,7 @@ resource cogServiceNameEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-previ
   parent: keyVault
   name: 'COG-SERVICES-NAME'
   properties: {
-    value: aiServicesName
+    value: aiFoundryName
   }
 }
 
@@ -323,14 +201,9 @@ resource azureLocatioEntry 'Microsoft.KeyVault/vaults/secrets@2021-11-01-preview
 output keyvaultName string = keyvaultName
 output keyvaultId string = keyVault.id
 
-output aiServicesName string = aiServicesName 
 output aiSearchName string = aiSearchName
-output aiProjectName string = aiHubProject.name
 
 output storageAccountName string = storageNameCleaned
 
 output logAnalyticsId string = useExisting ? existingLogAnalyticsWorkspace.id : logAnalytics.id
-output storageAccountId string = storage.id
 output applicationInsightsConnectionString string = applicationInsights.properties.ConnectionString
-
-output projectConnectionString string = '${split(aiHubProject.properties.discoveryUrl, '/')[2]};${subscription().subscriptionId};${resourceGroup().name};${aiHubProject.name}'
diff --git a/infra/main.bicep b/infra/main.bicep
index ec585c5..79933cb 100644
--- a/infra/main.bicep
+++ b/infra/main.bicep
@@ -57,9 +57,11 @@ var cosmosdbLogContainer  = 'cmsalog'
 var containerName  = 'appstorage'
 var storageSkuName = 'Standard_LRS'
 var storageContainerName = replace(replace(replace(replace('${ResourcePrefix}cast', '-', ''), '_', ''), '.', ''),'/', '')
-var azureAiServicesName = '${abbrs.ai.aiServices}${ResourcePrefix}'
-
 
+var aiFoundryName = '${abbrs.ai.aiFoundry}${ResourcePrefix}'
+var aiProjectDescription = 'AI foundary project for CPS template'
+var aiProjectName = '${abbrs.ai.aiFoundryProject}${ResourcePrefix}'
+var aiProjectFriendlyName = aiProjectName
 
 var aiModelDeployments = [
   {
@@ -74,15 +76,39 @@ var aiModelDeployments = [
   }
 ]
 
-resource azureAiServices 'Microsoft.CognitiveServices/accounts@2024-04-01-preview' = {
-  name: azureAiServicesName
+resource azureAiServices 'Microsoft.CognitiveServices/accounts@2025-04-01-preview' = {
+  name: aiFoundryName
   location: AzureAiServiceLocation
   sku: {
     name: 'S0'
   }
   kind: 'AIServices'
+  identity: {
+    type: 'SystemAssigned'
+  }
+  properties: {
+    allowProjectManagement: true
+    customSubDomainName: aiFoundryName
+    networkAcls: {
+      defaultAction: 'Allow'
+      virtualNetworkRules: []
+      ipRules: []
+    }
+    publicNetworkAccess: 'Enabled'
+    disableLocalAuth: false
+  }
+}
+
+resource aiFoundryProject 'Microsoft.CognitiveServices/accounts/projects@2025-04-01-preview' = {
+  parent: azureAiServices
+  name: aiProjectName
+  location: AzureAiServiceLocation
+  identity: {
+    type: 'SystemAssigned'
+  }
   properties: {
-    customSubDomainName: azureAiServicesName
+    description: aiProjectDescription
+    displayName: aiProjectFriendlyName
   }
 }
 
@@ -137,6 +163,7 @@ module azureAifoundry 'deploy_ai_foundry.bicep' = {
   params: {
     solutionName: ResourcePrefix
     solutionLocation: AzureAiServiceLocation
+    aiFoundryName: aiFoundryName
     keyVaultName: kvault.outputs.keyvaultName
     gptModelName: llmModel
     gptModelVersion: gptModelVersion
@@ -145,6 +172,7 @@ module azureAifoundry 'deploy_ai_foundry.bicep' = {
     aiServicesKey: azureAiServices.listKeys().key1
     aiServicesId: azureAiServices.id
     existingLogAnalyticsWorkspaceId: existingLogAnalyticsWorkspaceId
+    aureaiFoundryEndpoint: aiFoundryProject.properties.endpoints['AI Foundry API']
   }
   scope: resourceGroup(resourceGroup().name)
 }
@@ -323,7 +351,7 @@ resource containerAppBackend 'Microsoft.App/containerApps@2023-05-01' = {
             }
             {
               name: 'AZURE_OPENAI_ENDPOINT'
-              value: 'https://${azureAifoundry.outputs.aiServicesName}.openai.azure.com/'
+              value: 'https://${aiFoundryName}.openai.azure.com/'
             }
             {
               name: 'MIGRATOR_AGENT_MODEL_DEPLOY'
@@ -359,7 +387,7 @@ resource containerAppBackend 'Microsoft.App/containerApps@2023-05-01' = {
             }
             {
               name: 'AZURE_AI_AGENT_PROJECT_NAME'
-              value: azureAifoundry.outputs.aiProjectName
+              value: aiProjectName
             }
             {
               name: 'AZURE_AI_AGENT_RESOURCE_GROUP_NAME'
@@ -370,8 +398,8 @@ resource containerAppBackend 'Microsoft.App/containerApps@2023-05-01' = {
               value: subscription().subscriptionId
             }
             {
-              name: 'AZURE_AI_AGENT_PROJECT_CONNECTION_STRING'
-              value: azureAifoundry.outputs.projectConnectionString
+              name: 'AI_PROJECT_ENDPOINT'
+              value: aiFoundryProject.properties.endpoints['AI Foundry API']
             }
           ]
           resources: {
@@ -440,6 +468,7 @@ resource roleAssignment 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
   properties: {
     roleDefinitionId: subscriptionResourceId('Microsoft.Authorization/roleDefinitions', 'ba92f5b4-2d11-453d-a403-e96b0029c9fe') // Storage Blob Data Contributor
     principalId: containerAppBackend.identity.principalId
+    principalType: 'ServicePrincipal'
   }
 }
 var openAiContributorRoleId = 'a001fd3d-188f-4b5d-821b-7da978bf7442'  // Fixed Role ID for OpenAI Contributor
@@ -450,6 +479,7 @@ resource openAiRoleAssignment 'Microsoft.Authorization/roleAssignments@2022-04-0
   properties: {
     roleDefinitionId: subscriptionResourceId('Microsoft.Authorization/roleDefinitions', openAiContributorRoleId) // OpenAI Service Contributor
     principalId: containerAppBackend.identity.principalId
+    principalType: 'ServicePrincipal'
   }
 }
 
@@ -466,20 +496,42 @@ resource containers 'Microsoft.Storage/storageAccounts/blobServices/containers@2
   dependsOn: [azureAifoundry]
 }]
 
-resource aiHubProject 'Microsoft.MachineLearningServices/workspaces@2024-01-01-preview' existing = {
-  name: '${abbrs.ai.aiHubProject}${ResourcePrefix}' // aiProjectName must be calculated - available at main start.
-}
-
 resource aiDeveloper 'Microsoft.Authorization/roleDefinitions@2022-04-01' existing = {
   name: '64702f94-c441-49e6-a78b-ef80e0188fee'
 }
 
 resource aiDeveloperAccessProj 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
-  name: guid(containerAppBackend.name, aiHubProject.id, aiDeveloper.id)
-  scope: aiHubProject
+  name: guid(containerAppBackend.name, aiDeveloper.id)
+  scope: resourceGroup()
   properties: {
     roleDefinitionId: aiDeveloper.id
     principalId: containerAppBackend.identity.principalId
+    principalType: 'ServicePrincipal'
+  }
+}
+
+
+resource aiUser 'Microsoft.Authorization/roleDefinitions@2022-04-01' existing = {
+  name: '53ca6127-db72-4b80-b1b0-d745d6d5456d'
+}
+
+resource aiUserAccessProj 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
+  name: guid(containerAppBackend.name, aiUser.id)
+  scope: resourceGroup()
+  properties: {
+    roleDefinitionId: aiUser.id
+    principalId: containerAppBackend.identity.principalId
+    principalType: 'ServicePrincipal'
+  }
+}
+
+resource aiUserAccessFoundry 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
+  name: guid(containerAppBackend.name, aiFoundryProject.id)
+  scope: resourceGroup()
+  properties: {
+    roleDefinitionId: aiUser.id
+    principalId: containerAppBackend.identity.principalId
+    principalType: 'ServicePrincipal'
   }
 }
 
@@ -508,3 +560,7 @@ module deploymentScriptCLI 'br/public:avm/res/resources/deployment-script:0.5.1'
 }
 
 output AZURE_AIFOUNDRY_NAME string = azureAiServices.name
+
+output aiFoundryName string = aiFoundryName 
+output aiProjectName string = aiFoundryProject.name
+output projectEndpointString string = aiFoundryProject.properties.endpoints['AI Foundry API']
diff --git a/src/backend/common/config/config.py b/src/backend/common/config/config.py
index 24eb2fe..945cc8b 100644
--- a/src/backend/common/config/config.py
+++ b/src/backend/common/config/config.py
@@ -38,6 +38,7 @@ def __init__(self):
         self.azure_queue_name = os.getenv("AZURE_QUEUE_NAME")
 
         self.azure_openai_endpoint = os.getenv("AZURE_OPENAI_ENDPOINT")
+        self.ai_project_endpoint = os.getenv("AI_PROJECT_ENDPOINT")
         self.migrator_agent_model_deploy = os.getenv("MIGRATOR_AGENT_MODEL_DEPLOY")
         self.picker_agent_model_deploy = os.getenv("PICKER_AGENT_MODEL_DEPLOY")
         self.fixer_agent_model_deploy = os.getenv("FIXER_AGENT_MODEL_DEPLOY")
@@ -62,3 +63,4 @@ def get_azure_credentials(self):
 
 
 app_config = Config()
+print(f"[DEBUG] AI_PROJECT_ENDPOINT: '{os.getenv('AI_PROJECT_ENDPOINT')}'")
diff --git a/src/backend/requirements.txt b/src/backend/requirements.txt
index 3e01933..61aaae2 100644
--- a/src/backend/requirements.txt
+++ b/src/backend/requirements.txt
@@ -35,8 +35,8 @@ structlog
 typing-extensions
 python-jose[cryptography]
 passlib[bcrypt]
-semantic-kernel[azure]==1.27.2
-openai
+semantic-kernel[azure]==1.32.2
+openai==1.84.0
 sqlparse
 sqlglot
 unittest2
@@ -51,4 +51,4 @@ opentelemetry-api==1.31.1
 opentelemetry-semantic-conventions==0.52b1
 opentelemetry-instrumentation==0.52b1
 azure-monitor-opentelemetry==1.6.8
-azure-ai-projects==1.0.0b9
+azure-ai-projects==1.0.0b11
diff --git a/src/backend/sql_agents/agents/agent_base.py b/src/backend/sql_agents/agents/agent_base.py
index 34bb9e8..aec5793 100644
--- a/src/backend/sql_agents/agents/agent_base.py
+++ b/src/backend/sql_agents/agents/agent_base.py
@@ -4,7 +4,7 @@
 from abc import ABC, abstractmethod
 from typing import Any, Generic, List, Optional, TypeVar, Union
 
-from azure.ai.projects.models import (
+from azure.ai.agents.models import (
     ResponseFormatJsonSchema,
     ResponseFormatJsonSchemaType,
 )
diff --git a/src/backend/sql_agents/process_batch.py b/src/backend/sql_agents/process_batch.py
index b7b8401..cb22efe 100644
--- a/src/backend/sql_agents/process_batch.py
+++ b/src/backend/sql_agents/process_batch.py
@@ -11,6 +11,7 @@
 
 from azure.identity.aio import DefaultAzureCredential
 
+from common.config.config import app_config
 from common.models.api import (
     FileProcessUpdate,
     FileRecord,
@@ -60,7 +61,7 @@ async def process_batch_async(
     # Add client and auto cleanup
     async with (
         DefaultAzureCredential() as creds,
-        AzureAIAgent.create_client(credential=creds) as client,
+        AzureAIAgent.create_client(credential=creds, endpoint=app_config.ai_project_endpoint) as client,
     ):
 
         # setup all agent settings and agents per batch