Microsoft Signs $750 Million Azure Cloud Deal With AI Startup Perplexity
Microsoft has secured a major new win in the AI cloud race. AI startup Perplexity has signed a $750 million, three-year agreement with Microsoft Corp. to use its Azure cloud platform, expanding its infrastructure strategy beyond longtime partner Amazon Web Services (AWS).
According to sources familiar with the private agreement, the deal allows Perplexity to deploy and scale advanced AI models through Microsoft Foundry, including models from OpenAI, Anthropic, and xAI. The move strengthens Microsoft Azure’s position as a multi-model AI deployment hub.
A Perplexity spokesperson confirmed the partnership, stating the company is “excited to partner with Microsoft for access to frontier AI models from OpenAI, Anthropic, and xAI.”
Perplexity Maintains Strong Ties With Amazon AWS
Despite the high-profile Microsoft Azure deal, Perplexity emphasized that it has not reduced its spending on Amazon Web Services, which remains its primary cloud infrastructure provider.
“AWS continues to be Perplexity’s preferred cloud platform, and we’re looking forward to expanding that partnership in the coming weeks,” the spokesperson added.
Microsoft and Amazon declined to comment on the agreement.
Why Multi-Cloud Strategies Are Winning in the AI Era
Perplexity’s move reflects a growing trend among AI-driven companies: multi-cloud adoption. Large enterprises increasingly rely on multiple cloud providers to access specialized services, reduce dependency on a single vendor, and stay competitive as AI capabilities evolve rapidly.
This approach has accelerated in recent years as companies experiment with new AI tools, foundation models, and infrastructure partnerships.
Perplexity’s Competitive Position in the AI Search Market
Perplexity is among the most highly valued AI startups, but it faces intense competition from industry giants like Google (Alphabet Inc.) and OpenAI, both of which are aggressively reshaping how users search for and interact with information online.
Unlike OpenAI and Anthropic, Perplexity has raised significantly less capital, even as those rivals secure massive infrastructure investments and cloud partnerships.
Much of Perplexity’s early growth was built on AWS, particularly through Amazon Bedrock, which gave the company access to Anthropic’s AI models. CEO Aravind Srinivas has frequently praised AWS, even stating at an AWS conference in 2023 that Perplexity had gone “all-in” on Amazon’s cloud.
Legal Tensions Between Amazon and Perplexity
Despite their business relationship, Amazon and Perplexity have clashed legally. In November, Amazon filed a lawsuit aiming to block Perplexity from enabling AI-powered shopping features tied to Amazon’s marketplace.
Perplexity pushed back strongly, accusing Amazon of anti-competitive behavior and calling the lawsuit “a threat to user choice.” Srinivas revealed that Perplexity has committed “hundreds of millions of dollars” to AWS infrastructure.
Microsoft Strengthens Azure’s AI Ecosystem
For Microsoft, the Perplexity partnership reinforces its strategy to position Azure as the go-to platform for AI application development across multiple model providers.
Microsoft already offers OpenAI models through Azure and signed a deal with Anthropic in late 2024 to expand its AI offerings further.
“Our customers expect to use multiple models within the same workload,” Microsoft CEO Satya Nadella said during a recent earnings call. “We offer the broadest model selection of any hyperscaler.”
Nadella also revealed that over 1,500 Microsoft Foundry customers have already used both OpenAI and Anthropic models. Additionally, the number of Foundry customers spending more than $1 million per quarter surged nearly 80% in the quarter ending December.
