Microsoft Signs $750 Million Azure Cloud Deal With AI Startup Perplexity

Microsoft has signed a $750 million cloud computing agreement with artificial intelligence startup Perplexity, marking a significant expansion of the company’s Azure cloud services as competition intensifies in the AI infrastructure market.

The three-year deal will allow Perplexity to deploy advanced AI models through Microsoft Foundry, including models developed by OpenAI, Anthropic and xAI, according to people familiar with the agreement who requested anonymity because the matter is private.

The partnership reflects the growing trend among AI startups to adopt multi-cloud strategies while seeking access to the widest possible range of cutting-edge AI models.

What the Microsoft–Perplexity Deal Includes

Access to Frontier AI Models on Azure

Under the agreement, Perplexity will use Microsoft Azure to scale its AI workloads and access multiple frontier AI models via Microsoft Foundry.

Commenting on the partnership, a Perplexity spokesperson said:

“We are excited to partner with Microsoft for access to frontier models from X, OpenAI and Anthropic.”

This model-agnostic approach allows Perplexity to experiment with and deploy different AI systems depending on performance, cost and user needs.

AWS Still Remains Perplexity’s Primary Cloud Partner

Despite the Microsoft agreement, Perplexity emphasized that it has not shifted spending away from Amazon Web Services (AWS), which has historically been its main cloud provider.

The spokesperson clarified:

“AWS remains Perplexity’s preferred cloud infrastructure provider, and we’re excited to announce expansions of that partnership in the coming weeks.”

Perplexity previously built much of its AI search platform on AWS, using Amazon Bedrock to access Anthropic models. CEO Aravind Srinivas has frequently appeared at AWS conferences and said in a 2023 appearance that the company had decided to go “all-in” on Amazon’s cloud.

Legal Tensions Between Perplexity and Amazon

While AWS remains a key partner, the relationship between Amazon and Perplexity has faced challenges. In November, Amazon filed a lawsuit seeking to stop Perplexity from allowing users to shop and purchase items from Amazon’s online marketplace using its AI tools.

Perplexity responded strongly, calling Amazon a bully and describing its actions as “a threat to user choice.” Srinivas said in November that Perplexity had made “hundreds of millions” of dollars in commitments to AWS.

Both Microsoft and Amazon declined to comment on the new Azure agreement.

Why This Deal Matters for Microsoft Azure

Strengthening Azure as a Multi-Model AI Platform

For Microsoft, the Perplexity deal reinforces its strategy of positioning Azure as the preferred platform for AI application development, offering access to models from multiple vendors rather than locking customers into a single ecosystem.

Microsoft has already partnered closely with OpenAI and, in November, signed a deal to host Anthropic models on Azure as well.

Microsoft CEO Satya Nadella, speaking during an earnings call earlier this week, said:

“Our customers expect to use multiple models as part of any workload.”
“And we offer the broadest selection of models of any hyperscaler.”

Growing Adoption of Microsoft Foundry

Microsoft Foundry is gaining traction among enterprise and AI-focused customers. According to Nadella:

• Over 1,500 Foundry customers have already used both OpenAI and Anthropic models

• The number of customers spending more than $1 million per quarter on Foundry grew nearly 80% in the quarter ending December

These figures highlight Azure’s growing role as a central hub for AI experimentation and large-scale deployment.

Perplexity’s Competitive Landscape

Perplexity is among the most richly valued AI startups, but it faces intense competition from Alphabet’s Google and OpenAI in its effort to reinvent online search using AI.

Unlike rivals such as OpenAI and Anthropic, Perplexity has raised significantly less capital, making strategic infrastructure partnerships especially critical to scaling its services efficiently.

The Bigger Trend: Multi-Cloud in the AI Era

The Perplexity–Microsoft deal reflects a broader shift across the technology industry. Major companies increasingly rely on multiple cloud providers to:

• Reduce dependence on a single vendor

• Gain access to unique AI services

• Experiment rapidly with emerging models

This trend has accelerated during the AI boom, as cloud providers compete to host the most advanced models and attract fast-growing AI startups.