You have a Microsoft SQL Server 2025 instance that has a managed identity enabled.

The correct answer is Option B because the requirement is to call an Azure OpenAI REST endpoint from SQL Server 2025 while providing the highest level of security , and the instance already has a managed identity enabled . For Microsoft’s SQL AI features, the preferred secure pattern is to use a database scoped credential with IDENTITY = ' Managed Identity ' instead of storing an API key. Microsoft documents that SQL Server 2025 supports managed identity for external AI endpoints, and for Azure OpenAI the credential secret uses the Cognitive Services resource identifier: { " resourceid " : " https://cognitiveservices.azure.com " } .

So line 02 should be:

WITH IDENTITY = ' Managed Identity ' ,

SECRET = ' { " resourceid " : " https://cognitiveservices.azure.com " } ' ;

Why the other options are incorrect:

A and D use HTTP header or query-string credentials with an API key , which is less secure than managed identity because a secret key must be stored and rotated manually. Microsoft recommends managed identity where supported to avoid embedded secrets.

C mixes Managed Identity with an api-key secret, which is not the correct pattern for Azure OpenAI managed-identity authentication.

E uses an invalid identity value for this scenario. The accepted credential identities for external REST endpoint calls include HTTPEndpointHeaders , HTTPEndpointQueryString , Managed Identity , and Shared Access Signature .

Because the endpoint is Azure OpenAI and the question explicitly asks for the highest security , managed identity with the Cognitive Services resource ID is the Microsoft-aligned answer.