Perplexity Expands Cloud Strategy with Microsoft Azure Pact

Microsoft has sealed a deal worth $750 million with AI company Perplexity. This deal spans three years and represents a new chapter for Perplexity as they transition from relying on Amazon Web Services (AWS) for their cloud strategy.

Sources close to the deal suggest that, with this partnership, Perplexity will be able to use Microsoft Foundry to deploy certain AI models from Microsoft, including those owned by OpenAI, Anthropic, and xAI. This partnership enhances Microsoft’s ability to position Azure as a viable competitor in the multi-model AI industry.

AWS will continue to be the preferred cloud provider for Perplexity, and new partnerships will be announced shortly, the spokesperson stated. Commenting on the deal, Microsoft and Amazon declined to make any comments about it.

Perplexity is considered the industry leader alongside Google and OpenAI in transforming the online search space. Building AI models that serve the public has been difficult in part because, unlike most of their competitors, OpenAI and Anthropic, Perplexity has recently had to rely on these infrastructure partnerships to scale out their AI services.

This move also captures a more extensive industry pattern. Companies are using more strategies to minimize vendor lock and obtain specialized AI capabilities. As the need for large-scale AI workloads grows, this trend is accelerating.

Perplexity built most of its platform on Amazon Web Services (AWS), employing Amazon Bedrock to reach Anthropic models.

Chief Executive Officer Aravind Srinivas has previously stated that the company is “all-in” on Amazon’s cloud services. AWS has also pointed to Perplexity as one of its primary AI customers.

However, tensions have increased between the two companies. In November, Amazon sued Perplexity regarding the AI-powered shopping functionality. Perplexity stated that the lawsuit is “a threat to user choice,” and Srinivas said the company has allocated “hundreds of millions” of dollars for AWS.

For Microsoft, the deal strengthens Azure’s ambitions in AI.

“Our customers expect to use multiple models as part of any workload.”

said Microsoft Chief Executive Officer Satya Nadella.

He noted that Azure has the most extensive model assortment of the hyperscalers, and there was a significant increase in Foundry adoption and high-spending clients in the December quarter.

As the collaboration develops, more information is anticipated.