chore: various watsonx fixes

* use a logger
* update the distro to add the Files API otherwise it won't start since
  it is a dependency of vector
* clarify project_id and api_key requirements
* disable text_inference structured format tests
* fixed openai client initialization

Test plan:

Execute text_inference:

```
WATSONX_API_KEY=... WATSONX_PROJECT_ID=... python -m llama_stack.core.server.server llama_stack/distributions/watsonx/run.yaml
LLAMA_STACK_CONFIG=http://localhost:8321 uv run --group test pytest -vvvv -ra --text-model watsonx/meta-llama/llama-3-3-70b-instruct tests/integration/inference/test_text_inference.py

============================================= test session starts ==============================================
platform darwin -- Python 3.12.8, pytest-8.4.2, pluggy-1.6.0 -- /Users/leseb/Documents/AI/llama-stack/.venv/bin/python3
cachedir: .pytest_cache
metadata: {'Python': '3.12.8', 'Platform': 'macOS-15.6.1-arm64-arm-64bit', 'Packages': {'pytest': '8.4.2', 'pluggy': '1.6.0'}, 'Plugins': {'anyio': '4.9.0', 'html': '4.1.1', 'socket': '0.7.0', 'asyncio': '1.1.0', 'json-report': '1.5.0', 'timeout': '2.4.0', 'metadata': '3.1.1', 'cov': '6.2.1', 'nbval': '0.11.0', 'hydra-core': '1.3.2'}}
rootdir: /Users/leseb/Documents/AI/llama-stack
configfile: pyproject.toml
plugins: anyio-4.9.0, html-4.1.1, socket-0.7.0, asyncio-1.1.0, json-report-1.5.0, timeout-2.4.0, metadata-3.1.1, cov-6.2.1, nbval-0.11.0, hydra-core-1.3.2
asyncio: mode=Mode.AUTO, asyncio_default_fixture_loop_scope=None, asyncio_default_test_loop_scope=function
collected 20 items

tests/integration/inference/test_text_inference.py::test_text_completion_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:sanity] PASSED [  5%]
tests/integration/inference/test_text_inference.py::test_text_completion_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:sanity] PASSED [ 10%]
tests/integration/inference/test_text_inference.py::test_text_completion_stop_sequence[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:stop_sequence] XFAIL [ 15%]
tests/integration/inference/test_text_inference.py::test_text_completion_log_probs_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:log_probs] XFAIL [ 20%]
tests/integration/inference/test_text_inference.py::test_text_completion_log_probs_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:log_probs] XFAIL [ 25%]
tests/integration/inference/test_text_inference.py::test_text_completion_structured_output[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:structured_output] SKIPPED structured output) [ 30%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:non_streaming_01] PASSED [ 35%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:streaming_01] PASSED [ 40%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_tool_calling_and_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling] PASSED [ 45%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_tool_calling_and_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling] PASSED [ 50%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_tool_choice_required[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling] PASSED [ 55%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_tool_choice_none[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling] PASSED [ 60%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_structured_output[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:structured_output] SKIPPEDstructured output) [ 65%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_tool_calling_tools_not_in_request[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling_tools_absent-True] PASSED [ 70%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:text_then_tool] XFAIL [ 75%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:non_streaming_02] PASSED [ 80%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:streaming_02] PASSED [ 85%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_tool_calling_tools_not_in_request[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_calling_tools_absent-False] PASSED [ 90%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_then_answer] XFAIL [ 95%]
tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:array_parameter] XFAIL [100%]

=========================================== short test summary info ============================================
SKIPPED [2] tests/integration/inference/test_text_inference.py:49: Model watsonx/meta-llama/llama-3-3-70b-instruct hosted by remote::watsonx doesn't support json_schema structured output
XFAIL tests/integration/inference/test_text_inference.py::test_text_completion_stop_sequence[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:stop_sequence] - remote::watsonx doesn't support 'stop' parameter yet
XFAIL tests/integration/inference/test_text_inference.py::test_text_completion_log_probs_non_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:log_probs] - remote::watsonx doesn't support log probs yet
XFAIL tests/integration/inference/test_text_inference.py::test_text_completion_log_probs_streaming[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:completion:log_probs] - remote::watsonx doesn't support log probs yet
XFAIL tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:text_then_tool] - Not tested for non-llama4 models yet
XFAIL tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:tool_then_answer] - Not tested for non-llama4 models yet
XFAIL tests/integration/inference/test_text_inference.py::test_text_chat_completion_with_multi_turn_tool_calling[txt=watsonx/meta-llama/llama-3-3-70b-instruct-inference:chat_completion:array_parameter] - Not tested for non-llama4 models yet
============================ 12 passed, 2 skipped, 6 xfailed, 14 warnings in 36.88s ============================
```

Signed-off-by: Sébastien Han <seb@redhat.com>

docs/source/providers/inference/remote_watsonx.md

@@ -9,8 +9,8 @@ IBM WatsonX inference provider for accessing AI models on IBM's WatsonX platform
 | Field | Type | Required | Default | Description |
 |-------|------|----------|---------|-------------|
 | `url` | `<class 'str'>` | No | https://us-south.ml.cloud.ibm.com | A base url for accessing the watsonx.ai |
-| `api_key` | `pydantic.types.SecretStr \| None` | No |  | The watsonx API key, only needed of using the hosted service |
+| `api_key` | `pydantic.types.SecretStr \| None` | No |  | The watsonx API key |
-| `project_id` | `str \| None` | No |  | The Project ID key, only needed of using the hosted service |
+| `project_id` | `str \| None` | No |  | The Project ID key |
 | `timeout` | `<class 'int'>` | No | 60 | Timeout for the HTTP requests |
 
 ## Sample Configuration

llama_stack/distributions/watsonx/run.yaml

@@ -10,6 +10,7 @@ apis:
 - telemetry
 - tool_runtime
 - vector_io
+- files
 providers:
   inference:
   - provider_id: watsonx
@@ -94,6 +95,14 @@ providers:
     provider_type: inline::rag-runtime
   - provider_id: model-context-protocol
     provider_type: remote::model-context-protocol
+  files:
+  - provider_id: meta-reference-files
+    provider_type: inline::localfs
+    config:
+      storage_dir: ${env.FILES_STORAGE_DIR:=~/.llama/distributions/watsonx/files}
+      metadata_store:
+        type: sqlite
+        db_path: ${env.SQLITE_STORE_DIR:=~/.llama/distributions/watsonx}/files_metadata.db
 metadata_store:
   type: sqlite
   db_path: ${env.SQLITE_STORE_DIR:=~/.llama/distributions/watsonx}/registry.db

llama_stack/distributions/watsonx/watsonx.py

@@ -9,6 +9,7 @@ from pathlib import Path
 from llama_stack.apis.models import ModelType
 from llama_stack.core.datatypes import BuildProvider, ModelInput, Provider, ToolGroupInput
 from llama_stack.distributions.template import DistributionTemplate, RunConfigSettings, get_model_registry
+from llama_stack.providers.inline.files.localfs.config import LocalfsFilesImplConfig
 from llama_stack.providers.inline.inference.sentence_transformers import (
     SentenceTransformersInferenceConfig,
 )
@@ -16,7 +17,7 @@ from llama_stack.providers.remote.inference.watsonx import WatsonXConfig
 from llama_stack.providers.remote.inference.watsonx.models import MODEL_ENTRIES
 
 
-def get_distribution_template() -> DistributionTemplate:
+def get_distribution_template(name: str = "watsonx") -> DistributionTemplate:
     providers = {
         "inference": [
             BuildProvider(provider_type="remote::watsonx"),
@@ -42,6 +43,7 @@ def get_distribution_template() -> DistributionTemplate:
             BuildProvider(provider_type="inline::rag-runtime"),
             BuildProvider(provider_type="remote::model-context-protocol"),
         ],
+        "files": [BuildProvider(provider_type="inline::localfs")],
     }
 
     inference_provider = Provider(
@@ -79,9 +81,14 @@ def get_distribution_template() -> DistributionTemplate:
         },
     )
 
+    files_provider = Provider(
+        provider_id="meta-reference-files",
+        provider_type="inline::localfs",
+        config=LocalfsFilesImplConfig.sample_run_config(f"~/.llama/distributions/{name}"),
+    )
     default_models, _ = get_model_registry(available_models)
     return DistributionTemplate(
-        name="watsonx",
+        name=name,
         distro_type="remote_hosted",
         description="Use watsonx for running LLM inference",
         container_image=None,
@@ -92,6 +99,7 @@ def get_distribution_template() -> DistributionTemplate:
             "run.yaml": RunConfigSettings(
                 provider_overrides={
                     "inference": [inference_provider, embedding_provider],
+                    "files": [files_provider],
                 },
                 default_models=default_models + [embedding_model],
                 default_tool_groups=default_tool_groups,

llama_stack/providers/remote/inference/watsonx/config.py

@@ -26,11 +26,11 @@ class WatsonXConfig(BaseModel):
     )
     api_key: SecretStr | None = Field(
         default_factory=lambda: os.getenv("WATSONX_API_KEY"),
-        description="The watsonx API key, only needed of using the hosted service",
+        description="The watsonx API key",
     )
     project_id: str | None = Field(
         default_factory=lambda: os.getenv("WATSONX_PROJECT_ID"),
-        description="The Project ID key, only needed of using the hosted service",
+        description="The Project ID key",
     )
     timeout: int = Field(
         default=60,

llama_stack/providers/remote/inference/watsonx/watsonx.py

@@ -38,6 +38,7 @@ from llama_stack.apis.inference import (
     TopKSamplingStrategy,
     TopPSamplingStrategy,
 )
+from llama_stack.log import get_logger
 from llama_stack.providers.utils.inference.model_registry import ModelRegistryHelper
 from llama_stack.providers.utils.inference.openai_compat import (
     OpenAICompatCompletionChoice,
@@ -57,14 +58,29 @@ from llama_stack.providers.utils.inference.prompt_adapter import (
 from . import WatsonXConfig
 from .models import MODEL_ENTRIES
 
+logger = get_logger(name=__name__, category="inference::watsonx")
+
+
+# Note on structured output
+# WatsonX returns responses with a json embedded into a string.
+# Examples:
+
+# ChatCompletionResponse(completion_message=CompletionMessage(content='```json\n{\n
+# "first_name": "Michael",\n  "last_name": "Jordan",\n'...)
+# Not even a valid JSON, but we can still extract the JSON from the content
+
+# CompletionResponse(content=' \nThe best answer is $\\boxed{\\{"name": "Michael Jordan",
+# "year_born": "1963", "year_retired": "2003"\\}}$')
+# Find the start of the boxed content
+
 
 class WatsonXInferenceAdapter(Inference, ModelRegistryHelper):
     def __init__(self, config: WatsonXConfig) -> None:
         ModelRegistryHelper.__init__(self, MODEL_ENTRIES)
 
-        print(f"Initializing watsonx InferenceAdapter({config.url})...")
+        logger.info(f"Initializing watsonx InferenceAdapter({config.url})...")
-
         self._config = config
+        self._openai_client: AsyncOpenAI | None = None
 
         self._project_id = self._config.project_id
 

tests/integration/inference/test_openai_completion.py

@@ -58,6 +58,7 @@ def skip_if_model_doesnt_support_openai_completion(client_with_models, model_id)
         #  does not work with the specified model, gpt-5-mini. Please choose different model and try
         #  again. You can learn more about which models can be used with each operation here:
         #  https://go.microsoft.com/fwlink/?linkid=2197993.'}}"}
+        "remote::watsonx",  # return 404 when hitting the /openai/v1 endpoint
     ):
         pytest.skip(f"Model {model_id} hosted by {provider.provider_type} doesn't support OpenAI completions.")
 
@@ -110,6 +111,8 @@ def skip_if_model_doesnt_support_openai_chat_completion(client_with_models, mode
         "remote::cerebras",
         "remote::databricks",
         "remote::runpod",
+        "remote::tgi",
+        "remote::watsonx",  # watsonx returns 404 when hitting the /openai/v1 endpoint
     ):
         pytest.skip(f"Model {model_id} hosted by {provider.provider_type} doesn't support OpenAI chat completions.")
 

tests/integration/inference/test_text_inference.py

@@ -45,7 +45,7 @@ def skip_if_model_doesnt_support_json_schema_structured_output(client_with_model
     provider_id = models[model_id].provider_id
     providers = {p.provider_id: p for p in client_with_models.providers.list()}
     provider = providers[provider_id]
-    if provider.provider_type in ("remote::sambanova", "remote::azure"):
+    if provider.provider_type in ("remote::sambanova", "remote::azure", "remote::watsonx"):
         pytest.skip(
             f"Model {model_id} hosted by {provider.provider_type} doesn't support json_schema structured output"
         )
@@ -211,6 +211,7 @@ def test_text_completion_log_probs_streaming(client_with_models, text_model_id,
 )
 def test_text_completion_structured_output(client_with_models, text_model_id, test_case):
     skip_if_model_doesnt_support_completion(client_with_models, text_model_id)
+    skip_if_model_doesnt_support_json_schema_structured_output(client_with_models, text_model_id)
 
     class AnswerFormat(BaseModel):
         name: str