Building AI Agents on edge devices using Ollama + Phi-4-mini Function Calling
The new Phi-4-mini and Phi-4-multimodal now support Function Calling. This feature enables the models to connect with external tools and APIs. By deploying Phi-4-mini and Phi-4-multimodal with Function Calling capabilities on edge devices, we can achieve local expansion of knowledge capabilities and enhance their task execution efficiency. This blog will focus on how to use Phi-4-mini's Function Calling capabilities to build efficient AI Agents on edge devices. What‘s Function Calling How it works First we need to learn how Function Calling works Tool Integration: Function Calling allows LLM/SLM to interact with external tools and APIs, such as weather APIs, databases, or other services. Function Definition: Defines a function (tool) that LLM/SLM can call, specifying its name, parameters, and expected output. LLM Detection: LLM/SLM analyzes the user's input and determines if a function call is required and which function to use. JSON Output: LLM/SLM outputs a JSON object containing the name of the function to call and the parameters required by the function. External Execution: The application executes the function call using the parameters provided by LLM/SLM. Response to LLM: Returns the output of Function Calling to LLM/SLM, and LLM/SLM can use this information to generate a response to the user. Application scenarios Data retrieval: convert natural language queries into API calls to fetch data (e.g., "show my recent orders" triggers a database query) Operation execution: convert user requests into specific function calls (e.g., "schedule a meeting" becomes a calendar API call) Computational tasks: handle mathematical or logical operations through dedicated functions (e.g., calculate compound interest or statistical analysis) Data processing: chain multiple function calls together (e.g., get data → parse → transform → store) UI/UX integration: trigger interface updates based on user interactions (e.g., update map markers or display charts) Phi-4-mini / Phi-4-multimodal's Function Calling Phi-4-mini / Phi-4-multimodal supports single and parallel Function Calling. Things to note when calling You need to define Tools in System to start single or parallel Function Calling If you want to start parallel Function Calling, you also need to add 'some tools' to the System prompt The following is an example Single Function Calling tools = [ { "name": "get_match_result", "description": "get match result", "parameters": { "match": { "description": "The name of the match", "type": "str", "default": "Arsenal vs ManCity" } } }, ] messages = [ { "role": "system", "content": "You are a helpful assistant", "tools": json.dumps(tools), # pass the tools into system message using tools argument }, { "role": "user", "content": "What is the result of Arsenal vs ManCity today?" } ] Full Sample : Click Parallel Function Calling AGENT_TOOLS = { "booking_fight": { "name": "booking_fight", "description": "booking fight", "parameters": { "departure": { "description": "The name of Departure airport code", "type": "str", }, "destination": { "description": "The name of Destination airport code", "type": "str", }, "outbound_date": { "description": "The date of outbound flight", "type": "str", }, "return_date": { "description": "The date of return flight", "type": "str", } } }, "booking_hotel": { "name": "booking_hotel", "description": "booking hotel", "parameters": { "query": { "description": "The name of the city", "type": "str", }, "check_in_date": { "description": "The date of check in", "type": "str", }, "check_out_date": { "description": "The date of check out", "type": "str", } } }, } SYSTEM_PROMPT = """ You are my travel agent with some tools available. """ messages = [ { "role": "system", "content": SYSTEM_PROMPT, "tools": json.dumps(AGENT_TOOLS), # pass the tools into system message using tools argument }, { "role": "user", "content": """I have a business trip from London to New York in March 21 2025 to March 27 2025, can you help me to book a hotel and flight tickets""" } ] Full sample : click Using Ollama and Phi-4-mini Function Calling to Create AI Agents on Edge Devices Ollama is a popular free tool for deploying LLM/SLM locally and can be used in combination with AI Toolkit for VS Code. In addition to being deployed on your PC/Laptop, it can also be deployed on IoT, mobile phones, containers, etc. To use Phi-4-mini on Ollama, you need to use Ollama 0.5.13+. Different quantitative versions are supported on Ollama, as shown in the figure below: Using Ollama, we can deploy Phi-4-mini on the edge, and implement AI Agent with Function Calling under limited computing power, so that Generative AI can be applied more effectively on the edge. Current Issues A sad experience - If you directly use the interface to try to call Ollama in the above way, you will find that Function Calling will not be triggered. There are discussions on Ollama's GitHub Issue. You can enter the Issue https://github.com/ollama/ollama/issues/9437. By modifying the Phi-4-mini Template on the ModelFile to implement a single Function Calling, but the call to Parallel Function Calling still failed. Resolution We have implemented a fix by making a adjustments to the template. We have improved it according to Phi-4-mini's Chat Template and re-modified the Modelfile. Of course, the quantitative model has a huge impact on the results. The adjustments are as follows: TEMPLATE """ {{- if .Messages }} {{- if or .System .Tools }}<|system|> {{ if .System }}{{ .System }} {{- end }} In addition to plain text responses, you can chose to call one or more of the provided functions. Use the following rule to decide when to call a function: * if the response can be generated from your internal knowledge (e.g., as in the case of queries like "What is the capital of Poland?"), do so * if you need external information that can be obtained by calling one or more of the provided functions, generate a function calls If you decide to call functions: * prefix function calls with functools marker (no closing marker required) * all function calls should be generated in a single JSON list formatted as functools[{"name": [function name], "arguments": [function arguments as JSON]}, ...] * follow the provided JSON schema. Do not hallucinate arguments or values. Do to blindly copy values from the provided samples * respect the argument type formatting. E.g., if the type if number and format is float, write value 7 as 7.0 * make sure you pick the right functions that match the user intent Available functions as JSON spec: {{- if .Tools }} {{ .Tools }} {{- end }}<|end|> {{- end }} {{- range .Messages }} {{- if ne .Role "system" }}<|{{ .Role }}|> {{- if and .Content (eq .Role "tools") }} {"result": {{ .Content }}} {{- else if .Content }} {{ .Content }} {{- else if .ToolCalls }} functools[ {{- range .ToolCalls }}{{ "{" }}"name": "{{ .Function.Name }}", "arguments": {{ .Function.Arguments }}{{ "}" }} {{- end }}] {{- end }}<|end|> {{- end }} {{- end }}<|assistant|> {{ else }} {{- if .System }}<|system|> {{ .System }}<|end|>{{ end }}{{ if .Prompt }}<|user|> {{ .Prompt }}<|end|>{{ end }}<|assistant|> {{ end }}{{ .Response }}{{ if .Response }}<|user|>{{ end }} """ We have tested the solution using different quantitative models. In the laptop environment, we recommend that you use the following model to enable single/parallel Function Calling: phi4-mini:3.8b-fp16. Note: you need to bind the defined Modelfile and phi4-mini:3.8b-fp16 together to enable this to work. Please execute the following command in the command line: #If you haven't downloaded it yet, please execute this command firstr ollama run phi4-mini:3.8b-fp16 #Binding with the adjusted Modelfile ollama create phi4-mini:3.8b-fp16 -f {Your Modelfile Path} To test the single Function Calling and Parallel Function Calling of Phi-4-mini. Single Function Calling Parallel Function Calling Full Sample in notebook The above example is just a simple introduction. As we move forward with the development we hope to find simpler ways to apply it on the edge, use Function Calling to expand the scenarios of Phi-4-mini / Phi-4-multimodal, and also develop more usecases in vertical industries. Resources Phi-4 model on Hugging face https://huggingface.co/collections/microsoft/phi-4-677e9380e514feb5577a40e4 Phi-4-mini on Ollama https://ollama.com/library/phi4-mini Learn Function Calling https://huggingface.co/docs/hugs/en/guides/function-calling Phi Cookbook - Samples and Resources for Phi Models https://aka.ms/phicookbookStep-by-step: Integrate Ollama Web UI to use Azure Open AI API with LiteLLM Proxy
Introductions Ollama WebUI is a streamlined interface for deploying and interacting with open-source large language models (LLMs) like Llama 3 and Mistral, enabling users to manage models, test them via a ChatGPT-like chat environment, and integrate them into applications through Ollama’s local API. While it excels for self-hosted models on platforms like Azure VMs, it does not natively support Azure OpenAI API endpoints—OpenAI’s proprietary models (e.g., GPT-4) remain accessible only through OpenAI’s managed API. However, tools like LiteLLM bridge this gap, allowing developers to combine Ollama-hosted models with OpenAI’s API in hybrid workflows, while maintaining compliance and cost-efficiency. This setup empowers users to leverage both self-managed open-source models and cloud-based AI services. Problem Statement As of February 2025, Ollama WebUI, still do not support Azure Open AI API. The Ollama Web UI only support self-hosted Ollama API and managed OpenAI API service (PaaS). This will be an issue if users want to use Open AI models they already deployed on Azure AI Foundry. Objective To integrate Azure OpenAI API via LiteLLM proxy into with Ollama Web UI. LiteLLM translates Azure AI API requests into OpenAI-style requests on Ollama Web UI allowing users to use OpenAI models deployed on Azure AI Foundry. If you haven’t hosted Ollama WebUI already, follow my other step-by-step guide to host Ollama WebUI on Azure. Proceed to the next step if you have Ollama WebUI deployed already. Step 1: Deploy OpenAI models on Azure Foundry. If you haven’t created an Azure AI Hub already, search for Azure AI Foundry on Azure, and click on the “+ Create” button > Hub. Fill out all the empty fields with the appropriate configuration and click on “Create”. After the Azure AI Hub is successfully deployed, click on the deployed resources and launch the Azure AI Foundry service. To deploy new models on Azure AI Foundry, find the “Models + Endpoints” section on the left hand side and click on “+ Deploy Model” button > “Deploy base model” A popup will appear, and you can choose which models to deploy on Azure AI Foundry. Please note that the o-series models are only available to select customers at the moment. You can request access to the o-series models by completing this request access form, and wait until Microsoft approves the access request. Click on “Confirm” and another popup will emerge. Now name the deployment and click on “Deploy” to deploy the model. Wait a few moments for the model to deploy. Once it successfully deployed, please save the “Target URI” and the API Key. Step 2: Deploy LiteLLM Proxy via Docker Container Before pulling the LiteLLM Image into the host environment, create a file named “litellm_config.yaml” and list down the models you deployed on Azure AI Foundry, along with the API endpoints and keys. Replace "API_Endpoint" and "API_Key" with “Target URI” and “Key” found from Azure AI Foundry respectively. Template for the “litellm_config.yaml” file. model_list: - model_name: [model_name] litellm_params: model: azure/[model_name_on_azure] api_base: "[API_ENDPOINT/Target_URI]" api_key: "[API_Key]" api_version: "[API_Version]" Tips: You can find the API version info at the end of the Target URI of the model's endpoint: Sample Endpoint - https://example.openai.azure.com/openai/deployments/o1-mini/chat/completions?api-version=2024-08-01-preview Run the docker command below to start LiteLLM Proxy with the correct settings: docker run -d \ -v $(pwd)/litellm_config.yaml:/app/config.yaml \ -p 4000:4000 \ --name litellm-proxy-v1 \ --restart always \ ghcr.io/berriai/litellm:main-latest \ --config /app/config.yaml --detailed_debug Make sure to run the docker command inside the directory where you created the “litellm_config.yaml” file just now. The port used to listen for LiteLLM Proxy traffic is port 4000. Now that LiteLLM proxy had been deployed on port 4000, lets change the OpenAI API settings on Ollama WebUI. Navigate to Ollama WebUI’s Admin Panel settings > Settings > Connections > Under the OpenAI API section, write http://127.0.0.1:4000 as the API endpoint and set any key (You must write anything to make it work!). Click on “Save” button to reflect the changes. Refresh the browser and you should be able to see the AI models deployed on the Azure AI Foundry listed in the Ollama WebUI. Now let’s test the chat completion + Web Search capability using the "o1-mini" model on Ollama WebUI. Conclusion Hosting Ollama WebUI on an Azure VM and integrating it with OpenAI’s API via LiteLLM offers a powerful, flexible approach to AI deployment, combining the cost-efficiency of open-source models with the advanced capabilities of managed cloud services. While Ollama itself doesn’t support Azure OpenAI endpoints, the hybrid architecture empowers IT teams to balance data privacy (via self-hosted models on Azure AI Foundry) and cutting-edge performance (using Azure OpenAI API), all within Azure’s scalable ecosystem. This guide covers every step required to deploy your OpenAI models on Azure AI Foundry, set up the required resources, deploy LiteLLM Proxy on your host machine and configure Ollama WebUI to support Azure AI endpoints. You can test and improve your AI model even more with the Ollama WebUI interface with Web Search, Text-to-Image Generation, etc. all in one place.Using Advanced Reasoning Model on EdgeAI Part 1 - Quantization, Conversion, Performance
DeepSeek-R1 is very popular, and it can achieve the same capabilities as OpenAI o1 in advanced reasoning. Microsoft has also added DeepSeek-R1 models to Azure AI Foundry and GitHub Models. We can compare DeepSeek-R1 ith other available models through GitHub Models Playground Note This series revolves around deployment of SLMs to Edge Devices 'Edge AI' we will focus on the deployment advanced reasoning models, with different application scenarios. You can learn more in the following session AI Tour BRK453. In this experiement we want to deploy advanced reasoning models to the edge, so that they can run on edge devices with limited computing power and offline environments. At this time, the recommendation is to use the traditional ONNX model . We can use Microsoft Olive to convert the DeepSeek-R1 Distrill model. Getting started with Microsoft Olive is very straightforward. Install the Microsoft Olive library through the command line and Python 3.10+ (recommended) pip install olive-ai The DeepSeek-R1 Distrill model series has different parameters such as 1.5B, 7B, 8B, 14B, 32B, 70B, etc. This article is mainly based on the 1.5B, 7B, and 14B models (so a Small Language Model). CPU Inference Let's discuss 1.5B and 7B, which are models with lower parameter. We can directly use the CPU as computing for inference to test the effect (hardware environment Azure DevBox, AMD EPYC 7763 64-Core + 64GB Memory + 2T SSD) Quantization conversion olive auto-opt --model_name_or_path <Your DeepSeek-R1-Distill-Qwen-1.5B/7B local location> --output_path <Your Convert ONNX INT4 Model local location> --device cpu --provider CPUExecutionProvider --precision int4 --use_model_builder --log_level 1 You can download it directly from my Hugging face Repo (Note: This model is for testing and has not been fully tested by AI Content Safety or provided as an Offical Model) DeepSeek-R1-Distill-Qwen-1.5B-ONNX-INT4-CPU DeepSeek-R1-Distill-Qwen-7B-ONNX-INT4-CPU Running with ONNX Runtime GenAI Install ONNX Runtime GenAI and ONNX Runtime CPU support libraries pip install onnxruntime-genai pip install onnxruntime Sample Code https://github.com/kinfey/EdgeAIForAdvancedReasoning/blob/main/notebook/demo-1.5b.ipynb https://github.com/kinfey/EdgeAIForAdvancedReasoning/blob/main/notebook/demo-7b.ipynb Performance comparison 1.5B vs 7B We compare two different inference scenarios explain 1+1=2 1.5B quantized ONNX model memory occupied, time consumption and number of tokens generated: 7B quantized ONNX model memory occupied, time consumption and number of tokens generated 2. Find all pairwise different isomorphism groups with order 147 and no elements with order 49 1.5B quantized ONNX model memory occupied, time consumption and number of tokens generated: 7B quantized ONNX model memory occupied, time consumption and number of tokens generated Results of the numbers Through the test, we can see that the 1.5B model of DeepSeek is more suitable for use on CPU inference and can be deployed on traditional PCs or IoT devices. As for 7B, although it has better inference, it is not very effective on CPU operation. GPU Inference It is ideal if we have a GPU on the edge device. We can quantize and convert it to an ONNX model for CPU inference through Microsoft Olive. Of course, it can also be converted to a model for GPU inference. Here I take the 14B DeepSeek-R1-Distill-Qwen-14B as an example and make an inference comparison with Microsoft's Phi-4-14B Quantization conversion olive auto-opt --model_name_or_path <Your Phi-4-14B or DeepSeek-R1-Distill-Qwen-14B local path > --output_path <Your converted Phi-4-14B or DeepSeek-R1-Distill-Qwen-14B local path > --device gpu --provider CUDAExecutionProvider --precision int4 --use_model_builder --log_level 1 You can download it directly from my Hugging face Repo (Note: This model is for testing and has not been fully tested by AI Content Safety and not an Official Model) DeepSeek-R1-Distill-Qwen-14B-ONNX-INT4-GPU Phi-4-14B-ONNX-INT4-GPU Running with ONNX Runtime GenAI CUDA Install ONNX Runtime GenAI and ONNX Runtime GPU support libraries pip install onnxruntime-genai-cuda pip install onnxruntime-gpu Compare the results in the GPU environment with Gradio It is recommended to use a GPU with more than 8G memory To increase the comparison of the results, we compare it with Phi-4-14B-ONNX-INT4-GPU and DeepSeek-R1-Distill-Qwen-14B-ONNX-INT4-GPU to see the different results. We also show we use OpenAI o1-mini (it is recommended to use o1-mini through GitHub Models), Sample Code https://github.com/kinfey/EdgeAIForAdvancedReasoning/blob/main/notebook/Performance_AdvancedReasoning_ONNX_CPU.ipynb You can test any prompt on Gradio to compare the results of Phi-4-14B-ONNX-INT4-GPU, DeepSeek-R1-Distill-Qwen-14B-ONNX-INT4-GPU and OpenAI o1 mini. DeepSeek-R1 reduces the cost of inference models and produces more instructive results on professional problems, but Phi-4-14B also has advantages in reasoning and uses lower computing power to complete inference. As for OpenAI o1 mini, it is more comprehensive and can touch all problems. If you want to deploy to Edge Device, Phi-4-14B and quantized DeepSeek-R1 are good choices for you. This blog is just a simple test and the first in this series. Please share your feedback and continue the discussion in the Microsoft AI Discord Channel. Feel free to me a message or comment. We look forward to sharing more around the opportunity of EdgeAI and more content in this series. Resource DeepSeek-R1 in GitHub Models https://github.com/marketplace/models/azureml-deepseek/DeepSeek-R1 DeepSeek-R1 in Azure AI Foundry https://ai.azure.com/explore/models/DeepSeek-R1/version/1/registry/azureml-deepseek Phi-4-14B in Hugging face https://huggingface.co/microsoft/phi-4 Learn about Microsoft Olive https://github.com/microsoft/olive Learn about ONNX Runtime GenAI https://github.com/microsoft/onnxruntime-genai Microsoft AI Discord Channel BRK453 Exploring cutting-edge models: LLMs, SLMs, local development and more https://aka.ms/aitour/brk453
