diff --git a/src/khoj/processor/conversation/google/gemini_chat.py b/src/khoj/processor/conversation/google/gemini_chat.py
index 77cff325..7f18b079 100644
--- a/src/khoj/processor/conversation/google/gemini_chat.py
+++ b/src/khoj/processor/conversation/google/gemini_chat.py
@@ -121,6 +121,7 @@ def gemini_send_message_to_model(
     api_key,
     model,
     response_type="text",
+    response_schema=None,
     temperature=0.6,
     model_kwargs=None,
     tracer={},
@@ -135,6 +136,7 @@ def gemini_send_message_to_model(
     # This caused unwanted behavior and terminates response early for gemini 1.5 series. Monitor for flakiness with 2.0 series.
     if response_type == "json_object" and model in ["gemini-2.0-flash"]:
         model_kwargs["response_mime_type"] = "application/json"
+        model_kwargs["response_schema"] = response_schema
 
     # Get Response from Gemini
     return gemini_completion_with_backoff(
diff --git a/src/khoj/processor/conversation/google/utils.py b/src/khoj/processor/conversation/google/utils.py
index ebe91527..b1a5fe77 100644
--- a/src/khoj/processor/conversation/google/utils.py
+++ b/src/khoj/processor/conversation/google/utils.py
@@ -66,6 +66,7 @@ def gemini_completion_with_backoff(
         max_output_tokens=MAX_OUTPUT_TOKENS_GEMINI,
         safety_settings=SAFETY_SETTINGS,
         response_mime_type=model_kwargs.get("response_mime_type", "text/plain") if model_kwargs else "text/plain",
+        response_schema=model_kwargs.get("response_schema", None) if model_kwargs else None,
     )
 
     formatted_messages = [gtypes.Content(role=message.role, parts=message.content) for message in messages]
diff --git a/src/khoj/processor/conversation/openai/gpt.py b/src/khoj/processor/conversation/openai/gpt.py
index 389f52ab..f087fc93 100644
--- a/src/khoj/processor/conversation/openai/gpt.py
+++ b/src/khoj/processor/conversation/openai/gpt.py
@@ -10,8 +10,10 @@ from khoj.processor.conversation import prompts
 from khoj.processor.conversation.openai.utils import (
     chat_completion_with_backoff,
     completion_with_backoff,
+    get_openai_api_json_support,
 )
 from khoj.processor.conversation.utils import (
+    JsonSupport,
     clean_json,
     construct_structured_message,
     generate_chatml_messages_with_context,
@@ -119,12 +121,26 @@ def extract_questions(
 
 
 def send_message_to_model(
-    messages, api_key, model, response_type="text", api_base_url=None, temperature=0, tracer: dict = {}
+    messages,
+    api_key,
+    model,
+    response_type="text",
+    response_schema=None,
+    api_base_url=None,
+    temperature=0,
+    tracer: dict = {},
 ):
     """
     Send message to model
     """
 
+    model_kwargs = {}
+    json_support = get_openai_api_json_support(model, api_base_url)
+    if response_schema and json_support == JsonSupport.SCHEMA:
+        model_kwargs["response_format"] = response_schema
+    elif response_type == "json_object" and json_support == JsonSupport.OBJECT:
+        model_kwargs["response_format"] = {"type": response_type}
+
     # Get Response from GPT
     return completion_with_backoff(
         messages=messages,
@@ -132,7 +148,7 @@ def send_message_to_model(
         openai_api_key=api_key,
         temperature=temperature,
         api_base_url=api_base_url,
-        model_kwargs={"response_format": {"type": response_type}},
+        model_kwargs=model_kwargs,
         tracer=tracer,
     )
 
diff --git a/src/khoj/processor/conversation/openai/utils.py b/src/khoj/processor/conversation/openai/utils.py
index 444b6541..25ddd60a 100644
--- a/src/khoj/processor/conversation/openai/utils.py
+++ b/src/khoj/processor/conversation/openai/utils.py
@@ -2,6 +2,7 @@ import logging
 import os
 from threading import Thread
 from typing import Dict, List
+from urllib.parse import urlparse
 
 import openai
 from openai.types.chat.chat_completion import ChatCompletion
@@ -16,6 +17,7 @@ from tenacity import (
 )
 
 from khoj.processor.conversation.utils import (
+    JsonSupport,
     ThreadedGenerator,
     commit_conversation_trace,
 )
@@ -60,45 +62,29 @@ def completion_with_backoff(
 
     formatted_messages = [{"role": message.role, "content": message.content} for message in messages]
 
-    # Update request parameters for compatability with o1 model series
-    # Refer: https://platform.openai.com/docs/guides/reasoning/beta-limitations
-    stream = True
-    model_kwargs["stream_options"] = {"include_usage": True}
-    if model_name == "o1":
-        temperature = 1
-        stream = False
-        model_kwargs.pop("stream_options", None)
-    elif model_name.startswith("o1"):
-        temperature = 1
-        model_kwargs.pop("response_format", None)
-    elif model_name.startswith("o3-"):
+    # Tune reasoning models arguments
+    if model_name.startswith("o1") or model_name.startswith("o3"):
         temperature = 1
+        model_kwargs["reasoning_effort"] = "medium"
 
+    model_kwargs["stream_options"] = {"include_usage": True}
     if os.getenv("KHOJ_LLM_SEED"):
         model_kwargs["seed"] = int(os.getenv("KHOJ_LLM_SEED"))
 
-    chat: ChatCompletion | openai.Stream[ChatCompletionChunk] = client.chat.completions.create(
+    aggregated_response = ""
+    with client.beta.chat.completions.stream(
         messages=formatted_messages,  # type: ignore
-        model=model_name,  # type: ignore
-        stream=stream,
+        model=model_name,
         temperature=temperature,
         timeout=20,
         **model_kwargs,
-    )
-
-    aggregated_response = ""
-    if not stream:
-        chunk = chat
-        aggregated_response = chunk.choices[0].message.content
-    else:
+    ) as chat:
         for chunk in chat:
-            if len(chunk.choices) == 0:
+            if chunk.type == "error":
+                logger.error(f"Openai api response error: {chunk.error}", exc_info=True)
                 continue
-            delta_chunk = chunk.choices[0].delta  # type: ignore
-            if isinstance(delta_chunk, str):
-                aggregated_response += delta_chunk
-            elif delta_chunk.content:
-                aggregated_response += delta_chunk.content
+            elif chunk.type == "content.delta":
+                aggregated_response += chunk.delta
 
     # Calculate cost of chat
     input_tokens = chunk.usage.prompt_tokens if hasattr(chunk, "usage") and chunk.usage else 0
@@ -172,20 +158,13 @@ def llm_thread(
 
         formatted_messages = [{"role": message.role, "content": message.content} for message in messages]
 
-        # Update request parameters for compatability with o1 model series
-        # Refer: https://platform.openai.com/docs/guides/reasoning/beta-limitations
-        stream = True
-        model_kwargs["stream_options"] = {"include_usage": True}
-        if model_name == "o1":
+        # Tune reasoning models arguments
+        if model_name.startswith("o1"):
             temperature = 1
-            stream = False
-            model_kwargs.pop("stream_options", None)
-        elif model_name.startswith("o1-"):
+        elif model_name.startswith("o3"):
             temperature = 1
-            model_kwargs.pop("response_format", None)
-        elif model_name.startswith("o3-"):
-            temperature = 1
-            # Get the first system message and add the string `Formatting re-enabled` to it. See https://platform.openai.com/docs/guides/reasoning-best-practices
+            # Get the first system message and add the string `Formatting re-enabled` to it.
+            # See https://platform.openai.com/docs/guides/reasoning-best-practices
             if len(formatted_messages) > 0:
                 system_messages = [
                     (i, message) for i, message in enumerate(formatted_messages) if message["role"] == "system"
@@ -195,7 +174,6 @@ def llm_thread(
                     formatted_messages[first_system_message_index][
                         "content"
                     ] = f"{first_system_message} Formatting re-enabled"
-
         elif model_name.startswith("deepseek-reasoner"):
             # Two successive messages cannot be from the same role. Should merge any back-to-back messages from the same role.
             # The first message should always be a user message (except system message).
@@ -210,6 +188,8 @@ def llm_thread(
 
             formatted_messages = updated_messages
 
+        stream = True
+        model_kwargs["stream_options"] = {"include_usage": True}
         if os.getenv("KHOJ_LLM_SEED"):
             model_kwargs["seed"] = int(os.getenv("KHOJ_LLM_SEED"))
 
@@ -258,3 +238,13 @@ def llm_thread(
         logger.error(f"Error in llm_thread: {e}", exc_info=True)
     finally:
         g.close()
+
+
+def get_openai_api_json_support(model_name: str, api_base_url: str = None) -> JsonSupport:
+    if model_name.startswith("deepseek-reasoner"):
+        return JsonSupport.NONE
+    if api_base_url:
+        host = urlparse(api_base_url).hostname
+        if host and host.endswith(".ai.azure.com"):
+            return JsonSupport.OBJECT
+    return JsonSupport.SCHEMA
diff --git a/src/khoj/processor/conversation/utils.py b/src/khoj/processor/conversation/utils.py
index a7e6e694..de82f067 100644
--- a/src/khoj/processor/conversation/utils.py
+++ b/src/khoj/processor/conversation/utils.py
@@ -878,3 +878,9 @@ def messages_to_print(messages: list[ChatMessage], max_length: int = 70) -> str:
             return str(content)
 
     return "\n".join([f"{json.dumps(safe_serialize(message.content))[:max_length]}..." for message in messages])
+
+
+class JsonSupport(int, Enum):
+    NONE = 0
+    OBJECT = 1
+    SCHEMA = 2
diff --git a/src/khoj/routers/helpers.py b/src/khoj/routers/helpers.py
index 75f38948..caca0eaa 100644
--- a/src/khoj/routers/helpers.py
+++ b/src/khoj/routers/helpers.py
@@ -540,11 +540,15 @@ async def generate_online_subqueries(
 
     agent_chat_model = agent.chat_model if agent else None
 
+    class OnlineQueries(BaseModel):
+        queries: List[str]
+
     with timer("Chat actor: Generate online search subqueries", logger):
         response = await send_message_to_model_wrapper(
             online_queries_prompt,
             query_images=query_images,
             response_type="json_object",
+            response_schema=OnlineQueries,
             user=user,
             query_files=query_files,
             agent_chat_model=agent_chat_model,
@@ -1129,6 +1133,7 @@ async def send_message_to_model_wrapper(
     query: str,
     system_message: str = "",
     response_type: str = "text",
+    response_schema: BaseModel = None,
     deepthought: bool = False,
     user: KhojUser = None,
     query_images: List[str] = None,
@@ -1209,6 +1214,7 @@ async def send_message_to_model_wrapper(
             api_key=api_key,
             model=chat_model_name,
             response_type=response_type,
+            response_schema=response_schema,
             api_base_url=api_base_url,
             tracer=tracer,
         )
@@ -1255,6 +1261,7 @@ async def send_message_to_model_wrapper(
             api_key=api_key,
             model=chat_model_name,
             response_type=response_type,
+            response_schema=response_schema,
             tracer=tracer,
         )
     else:
@@ -1265,6 +1272,7 @@ def send_message_to_model_wrapper_sync(
     message: str,
     system_message: str = "",
     response_type: str = "text",
+    response_schema: BaseModel = None,
     user: KhojUser = None,
     query_images: List[str] = None,
     query_files: str = "",
@@ -1326,6 +1334,7 @@ def send_message_to_model_wrapper_sync(
             api_base_url=api_base_url,
             model=chat_model_name,
             response_type=response_type,
+            response_schema=response_schema,
             tracer=tracer,
         )
 
@@ -1370,6 +1379,7 @@ def send_message_to_model_wrapper_sync(
             api_key=api_key,
             model=chat_model_name,
             response_type=response_type,
+            response_schema=response_schema,
             tracer=tracer,
         )
     else:
diff --git a/src/khoj/routers/research.py b/src/khoj/routers/research.py
index 07a66002..6e2493c5 100644
--- a/src/khoj/routers/research.py
+++ b/src/khoj/routers/research.py
@@ -1,10 +1,12 @@
 import logging
 import os
 from datetime import datetime
-from typing import Callable, Dict, List, Optional
+from enum import Enum
+from typing import Callable, Dict, List, Optional, Type
 
 import yaml
 from fastapi import Request
+from pydantic import BaseModel, Field
 
 from khoj.database.adapters import EntryAdapters
 from khoj.database.models import Agent, KhojUser
@@ -36,6 +38,40 @@ from khoj.utils.rawconfig import LocationData
 logger = logging.getLogger(__name__)
 
 
+class PlanningResponse(BaseModel):
+    """
+    Schema for the response from planning agent when deciding the next tool to pick.
+    The tool field is dynamically validated based on available tools.
+    """
+
+    scratchpad: str = Field(..., description="Reasoning about which tool to use next")
+    query: str = Field(..., description="Detailed query for the selected tool")
+
+    class Config:
+        arbitrary_types_allowed = True
+
+    @classmethod
+    def create_model_with_enum(cls: Type["PlanningResponse"], tool_options: dict) -> Type["PlanningResponse"]:
+        """
+        Factory method that creates a customized PlanningResponse model
+        with a properly typed tool field based on available tools.
+
+        Args:
+            tool_options: Dictionary mapping tool names to values
+
+        Returns:
+            A customized PlanningResponse class
+        """
+        # Create dynamic enum from tool options
+        tool_enum = Enum("ToolEnum", tool_options)  # type: ignore
+
+        # Create and return a customized response model with the enum
+        class PlanningResponseWithTool(PlanningResponse):
+            tool: tool_enum = Field(..., description="Name of the tool to use")
+
+        return PlanningResponseWithTool
+
+
 async def apick_next_tool(
     query: str,
     conversation_history: dict,
@@ -61,10 +97,13 @@ async def apick_next_tool(
         # Skip showing Notes tool as an option if user has no entries
         if tool == ConversationCommand.Notes and not user_has_entries:
             continue
-        tool_options[tool.value] = description
         if len(agent_tools) == 0 or tool.value in agent_tools:
+            tool_options[tool.name] = tool.value
             tool_options_str += f'- "{tool.value}": "{description}"\n'
 
+    # Create planning reponse model with dynamically populated tool enum class
+    planning_response_model = PlanningResponse.create_model_with_enum(tool_options)
+
     # Construct chat history with user and iteration history with researcher agent for context
     chat_history = construct_chat_history(conversation_history, agent_name=agent.name if agent else "Khoj")
     previous_iterations_history = construct_iteration_history(previous_iterations, prompts.previous_iteration)
@@ -96,6 +135,7 @@ async def apick_next_tool(
                 query=query,
                 context=function_planning_prompt,
                 response_type="json_object",
+                response_schema=planning_response_model,
                 deepthought=True,
                 user=user,
                 query_images=query_images,