Complete feature: embeddings batching, retries, managed identity

src/Core/Config/AppConfig.cs

@@ -10,7 +10,9 @@ namespace KernelMemory.Core.Config;
 /// Root configuration for Kernel Memory application
 /// Loaded from ~/.km/config.json or custom path
 /// </summary>
+#pragma warning disable CA1724 // Conflicts with Microsoft.Identity.Client.AppConfig when Azure.Identity is referenced.
 public sealed class AppConfig : IValidatable
+#pragma warning restore CA1724
 {
     /// <summary>
     /// Named memory nodes (e.g., "personal", "work")

src/Core/Config/Embeddings/AzureOpenAIEmbeddingsConfig.cs

@@ -81,5 +81,10 @@ public override void Validate(string path)
             throw new ConfigException(path,
                 "Azure OpenAI: specify either ApiKey or UseManagedIdentity, not both");
         }
+
+        if (this.BatchSize < 1)
+        {
+            throw new ConfigException($"{path}.BatchSize", "BatchSize must be >= 1");
+        }
     }
 }

src/Core/Config/Embeddings/EmbeddingsConfig.cs

@@ -21,6 +21,14 @@ public abstract class EmbeddingsConfig : IValidatable
     [JsonIgnore]
     public abstract EmbeddingsTypes Type { get; }
 
+    /// <summary>
+    /// Maximum number of texts to send per embeddings API request.
+    /// Providers that support batch requests should chunk input using this size.
+    /// Default: 10.
+    /// </summary>
+    [JsonPropertyName("batchSize")]
+    public int BatchSize { get; set; } = Constants.EmbeddingDefaults.DefaultBatchSize;
+
     /// <summary>
     /// Validates the embeddings configuration
     /// </summary>

src/Core/Config/Embeddings/HuggingFaceEmbeddingsConfig.cs

@@ -44,9 +44,16 @@ public override void Validate(string path)
             throw new ConfigException($"{path}.Model", "HuggingFace model name is required");
         }
 
-        if (string.IsNullOrWhiteSpace(this.ApiKey))
+        // ApiKey can be provided via config or HF_TOKEN environment variable
+        if (string.IsNullOrWhiteSpace(this.ApiKey) &&
+            string.IsNullOrWhiteSpace(Environment.GetEnvironmentVariable("HF_TOKEN")))
         {
-            throw new ConfigException($"{path}.ApiKey", "HuggingFace API key is required");
+            throw new ConfigException($"{path}.ApiKey", "HuggingFace API key is required (set ApiKey or HF_TOKEN)");
+        }
+
+        if (this.BatchSize < 1)
+        {
+            throw new ConfigException($"{path}.BatchSize", "BatchSize must be >= 1");
         }
 
         if (string.IsNullOrWhiteSpace(this.BaseUrl))

src/Core/Config/Embeddings/OllamaEmbeddingsConfig.cs

@@ -39,6 +39,11 @@ public override void Validate(string path)
             throw new ConfigException($"{path}.BaseUrl", "Ollama base URL is required");
         }
 
+        if (this.BatchSize < 1)
+        {
+            throw new ConfigException($"{path}.BatchSize", "BatchSize must be >= 1");
+        }
+
         if (!Uri.TryCreate(this.BaseUrl, UriKind.Absolute, out _))
         {
             throw new ConfigException($"{path}.BaseUrl",

src/Core/Config/Embeddings/OpenAIEmbeddingsConfig.cs

@@ -45,6 +45,11 @@ public override void Validate(string path)
             throw new ConfigException($"{path}.ApiKey", "OpenAI API key is required");
         }
 
+        if (this.BatchSize < 1)
+        {
+            throw new ConfigException($"{path}.BatchSize", "BatchSize must be >= 1");
+        }
+
         if (!string.IsNullOrWhiteSpace(this.BaseUrl) &&
             !Uri.TryCreate(this.BaseUrl, UriKind.Absolute, out _))
         {

src/Core/Constants.cs

@@ -210,6 +210,39 @@ public static bool TryGetDimensions(string modelName, out int dimensions)
         }
     }
 
+    /// <summary>
+    /// Constants for HTTP retry/backoff used by external providers (embeddings, etc.).
+    /// </summary>
+    public static class HttpRetryDefaults
+    {
+        /// <summary>
+        /// Maximum attempts including the first try.
+        /// </summary>
+        public const int MaxAttempts = 5;
+
+        /// <summary>
+        /// Default timeout per attempt (seconds).
+        /// Applied by <see cref="KernelMemory.Core.Http.HttpRetryPolicy"/> to avoid hanging calls.
+        /// </summary>
+        public const int DefaultPerAttemptTimeoutSeconds = 60;
+
+        /// <summary>
+        /// Per-attempt timeout for local Ollama calls (seconds).
+        /// Keep this low so local development and tests fail fast when Ollama is not running.
+        /// </summary>
+        public const int OllamaPerAttemptTimeoutSeconds = 5;
+
+        /// <summary>
+        /// Base delay for exponential backoff.
+        /// </summary>
+        public const int BaseDelayMs = 200;
+
+        /// <summary>
+        /// Maximum delay between attempts.
+        /// </summary>
+        public const int MaxDelayMs = 5000;
+    }
+
     /// <summary>
     /// Constants for the logging system including file rotation, log levels,
     /// and output formatting.

src/Core/Core.csproj

@@ -7,6 +7,7 @@
     </PropertyGroup>
 
     <ItemGroup>
+      <PackageReference Include="Azure.Identity" />
       <PackageReference Include="cuid.net" />
       <PackageReference Include="Microsoft.EntityFrameworkCore.Sqlite" />
       <PackageReference Include="Parlot" />

src/Core/Embeddings/Providers/AzureOpenAIEmbeddingGenerator.cs

@@ -1,23 +1,31 @@
 // Copyright (c) Microsoft. All rights reserved.
+using System.Net.Http.Headers;
 using System.Net.Http.Json;
 using System.Text.Json.Serialization;
+using Azure.Core;
+using Azure.Identity;
 using KernelMemory.Core.Config.Enums;
+using KernelMemory.Core.Http;
 using Microsoft.Extensions.Logging;
 
 namespace KernelMemory.Core.Embeddings.Providers;
 
 /// <summary>
 /// Azure OpenAI embedding generator implementation.
 /// Communicates with Azure OpenAI Service.
-/// Supports API key authentication (managed identity would require Azure.Identity package).
+/// Supports API key authentication or managed identity via <see cref="DefaultAzureCredential"/>.
 /// </summary>
 public sealed class AzureOpenAIEmbeddingGenerator : IEmbeddingGenerator
 {
     private readonly HttpClient _httpClient;
     private readonly string _endpoint;
     private readonly string _deployment;
-    private readonly string _apiKey;
+    private readonly string? _apiKey;
+    private readonly bool _useManagedIdentity;
+    private readonly TokenCredential? _credential;
+    private readonly int _batchSize;
     private readonly ILogger<AzureOpenAIEmbeddingGenerator> _logger;
+    private readonly Func<TimeSpan, CancellationToken, Task> _delayAsync;
 
     /// <inheritdoc />
     public EmbeddingsTypes ProviderType => EmbeddingsTypes.AzureOpenAI;
@@ -38,35 +46,52 @@ public sealed class AzureOpenAIEmbeddingGenerator : IEmbeddingGenerator
     /// <param name="endpoint">Azure OpenAI endpoint (e.g., https://myservice.openai.azure.com).</param>
     /// <param name="deployment">Deployment name in Azure.</param>
     /// <param name="model">Model name for identification.</param>
-    /// <param name="apiKey">Azure OpenAI API key.</param>
+    /// <param name="apiKey">Azure OpenAI API key (required unless <paramref name="useManagedIdentity"/> is true).</param>
     /// <param name="vectorDimensions">Vector dimensions produced by the model.</param>
     /// <param name="isNormalized">Whether vectors are normalized.</param>
     /// <param name="logger">Logger instance.</param>
+    /// <param name="batchSize">Maximum number of texts per API request.</param>
+    /// <param name="useManagedIdentity">Whether to authenticate using managed identity.</param>
+    /// <param name="credential">Optional token credential (used for testing); defaults to <see cref="DefaultAzureCredential"/>.</param>
+    /// <param name="delayAsync">Optional delay function for retries (used for fast unit tests).</param>
     public AzureOpenAIEmbeddingGenerator(
         HttpClient httpClient,
         string endpoint,
         string deployment,
         string model,
-        string apiKey,
+        string? apiKey,
         int vectorDimensions,
         bool isNormalized,
-        ILogger<AzureOpenAIEmbeddingGenerator> logger)
+        ILogger<AzureOpenAIEmbeddingGenerator> logger,
+        int batchSize,
+        bool useManagedIdentity,
+        TokenCredential? credential = null,
+        Func<TimeSpan, CancellationToken, Task>? delayAsync = null)
     {
         ArgumentNullException.ThrowIfNull(httpClient, nameof(httpClient));
         ArgumentNullException.ThrowIfNull(endpoint, nameof(endpoint));
         ArgumentNullException.ThrowIfNull(deployment, nameof(deployment));
         ArgumentNullException.ThrowIfNull(model, nameof(model));
-        ArgumentNullException.ThrowIfNull(apiKey, nameof(apiKey));
         ArgumentNullException.ThrowIfNull(logger, nameof(logger));
+        ArgumentOutOfRangeException.ThrowIfLessThan(batchSize, 1, nameof(batchSize));
 
         this._httpClient = httpClient;
         this._endpoint = endpoint.TrimEnd('/');
         this._deployment = deployment;
         this._apiKey = apiKey;
+        this._useManagedIdentity = useManagedIdentity;
+        this._credential = credential;
+        this._batchSize = batchSize;
         this.ModelName = model;
         this.VectorDimensions = vectorDimensions;
         this.IsNormalized = isNormalized;
         this._logger = logger;
+        this._delayAsync = delayAsync ?? Task.Delay;
+
+        if (!this._useManagedIdentity && string.IsNullOrWhiteSpace(this._apiKey))
+        {
+            throw new ArgumentException("Azure OpenAI API key is required when not using managed identity", nameof(apiKey));
+        }
 
         this._logger.LogDebug("AzureOpenAIEmbeddingGenerator initialized: {Endpoint}, deployment: {Deployment}, model: {Model}",
             this._endpoint, this._deployment, this.ModelName);
@@ -88,21 +113,53 @@ public async Task<EmbeddingResult[]> GenerateAsync(IEnumerable<string> texts, Ca
             return [];
         }
 
+        var allResults = new List<EmbeddingResult>(textArray.Length);
+        foreach (var chunk in Chunk(textArray, this._batchSize))
+        {
+            var chunkResults = await this.GenerateBatchAsync(chunk, ct).ConfigureAwait(false);
+            allResults.AddRange(chunkResults);
+        }
+
+        return allResults.ToArray();
+    }
+
+    private async Task<EmbeddingResult[]> GenerateBatchAsync(string[] textArray, CancellationToken ct)
+    {
         var url = $"{this._endpoint}/openai/deployments/{this._deployment}/embeddings?api-version={Constants.EmbeddingDefaults.AzureOpenAIApiVersion}";
 
         var request = new AzureEmbeddingRequest
         {
             Input = textArray
         };
 
-        using var httpRequest = new HttpRequestMessage(HttpMethod.Post, url);
-        httpRequest.Headers.Add("api-key", this._apiKey);
-        httpRequest.Content = JsonContent.Create(request);
+        var bearerToken = this._useManagedIdentity
+            ? await this.GetManagedIdentityTokenAsync(ct).ConfigureAwait(false)
+            : null;
 
         this._logger.LogTrace("Calling Azure OpenAI embeddings API: deployment={Deployment}, batch size: {BatchSize}",
             this._deployment, textArray.Length);
 
-        var response = await this._httpClient.SendAsync(httpRequest, ct).ConfigureAwait(false);
+        using var response = await HttpRetryPolicy.SendAsync(
+            this._httpClient,
+            requestFactory: () =>
+            {
+                var httpRequest = new HttpRequestMessage(HttpMethod.Post, url);
+                if (bearerToken != null)
+                {
+                    httpRequest.Headers.Authorization = new AuthenticationHeaderValue("Bearer", bearerToken);
+                }
+                else
+                {
+                    httpRequest.Headers.Add("api-key", this._apiKey);
+                }
+
+                httpRequest.Content = JsonContent.Create(request);
+                return httpRequest;
+            },
+            this._logger,
+            ct,
+            delayAsync: this._delayAsync).ConfigureAwait(false);
+
         response.EnsureSuccessStatusCode();
 
         var result = await response.Content.ReadFromJsonAsync<AzureEmbeddingResponse>(ct).ConfigureAwait(false);
@@ -141,6 +198,26 @@ public async Task<EmbeddingResult[]> GenerateAsync(IEnumerable<string> texts, Ca
         return results;
     }
 
+    private async Task<string> GetManagedIdentityTokenAsync(CancellationToken ct)
+    {
+        var credential = this._credential ?? new DefaultAzureCredential();
+        var token = await credential.GetTokenAsync(
+            new TokenRequestContext(["https://cognitiveservices.azure.com/.default"]),
+            ct).ConfigureAwait(false);
+        return token.Token;
+    }
+
+    private static IEnumerable<string[]> Chunk(string[] items, int chunkSize)
+    {
+        for (int i = 0; i < items.Length; i += chunkSize)
+        {
+            var length = Math.Min(chunkSize, items.Length - i);
+            var chunk = new string[length];
+            Array.Copy(items, i, chunk, 0, length);
+            yield return chunk;
+        }
+    }
+
     /// <summary>
     /// Request body for Azure OpenAI embeddings API.
     /// </summary>