Perplexity Signs $750M AI Cloud Deal With Microsoft to Run Advanced Models on Azure

Perplexity has just made headlines with a $750 million cloud deal with Microsoft, marking a major step in its AI development journey.

The startup will use Microsoft’s Azure cloud service to run advanced AI models from OpenAI, Anthropic, and xAI.

Despite this new partnership, Perplexity continues to rely on Amazon Web Services as its primary cloud provider, showing a growing trend of AI firms diversifying infrastructure.

The deal also comes amid ongoing legal disputes with Amazon, adding complexity to the startup’s cloud strategy.

The agreement represents a significant milestone for Perplexity, giving it access to powerful AI infrastructure while expanding its footprint in the competitive AI startup ecosystem.

Key Takeaways

• Perplexity secures a $750 million Azure cloud deal to run advanced AI models from OpenAI, Anthropic, and xAI.

• AWS remains the startup’s primary cloud provider, demonstrating a multi-cloud strategy for flexibility and performance.

• The deal highlights a growing trend of AI firms partnering with multiple cloud providers to scale operations and unlock exclusive features.

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Microsoft Partnership Opens Access to Frontier AI Models

The deal allows Perplexity to leverage Microsoft’s Foundry platform, which hosts models from top AI developers like OpenAI, Anthropic, and xAI.

This access provides Perplexity with an advanced toolkit for improving its AI-powered search engine capabilities.

Advantages of Microsoft Azure for Perplexity

• Advanced Model Access: Perplexity can run cutting-edge AI models without building the infrastructure from scratch.

• Scalability: Azure’s robust cloud architecture supports high-volume AI computations essential for real-time applications.

• Strategic Visibility: Partnering with Microsoft strengthens Perplexity’s credibility in the AI industry and can attract new investments.

While this deal adds Microsoft as a key cloud partner, Perplexity emphasizes that AWS remains its primary provider.

This hybrid approach allows the startup to balance operational reliability with access to innovative services exclusive to Microsoft.

Read Also: AI Adoption Must Broaden to Prevent Bubble, Microsoft Chief Says at Davos

Legal Disputes With Amazon Highlight Cloud Strategy Complexity

Perplexity’s expansion to Azure comes amid legal disputes with Amazon, which claims the startup’s “agentic” shopping feature accessed Amazon accounts without authorization.

Despite this, Perplexity maintains its investments in AWS, arguing that Amazon’s infrastructure remains critical for day-to-day operations.

Key Considerations

• Hybrid Cloud Approach: Using both Azure and AWS allows Perplexity to access multiple AI ecosystems while maintaining operational continuity.

• Investor Concerns: Some investors questioned the shift to Microsoft, but Perplexity reassured stakeholders that AWS commitments continue.

• Industry Implications: The situation highlights the increasingly complex relationships between AI startups and cloud providers, especially when legal and business interests intersect.

By maintaining ties with both cloud giants, Perplexity mitigates risk, ensures redundancy, and can experiment with different AI models to enhance its search platform.

Read Also: Which Technology Giant Will Launch Autonomous AI Agents Next Month?

Implications for the AI Startup Ecosystem

Perplexity’s deal underscores a broader trend in the AI industry: startups are diversifying cloud partnerships to gain competitive advantages.

Leveraging multiple platforms helps AI firms optimize costs, access exclusive models, and avoid dependency on a single provider.

Multi-Cloud Benefits

• Flexibility: Startups can choose the best services from different providers based on performance and cost.

• Innovation: Access to Microsoft Foundry allows Perplexity to explore new AI applications.

• Market Credibility: High-profile cloud partnerships enhance visibility and can attract further investment.

This approach demonstrates that cloud infrastructure is not just a backend utility but a strategic asset that shapes the competitive positioning of AI companies.

Perplexity’s hybrid cloud strategy sets an example for emerging AI firms aiming to balance performance, innovation, and risk management.

Read Also: OpenAI, Perplexity, and Web3: Who’s Leading the AI Agent Revolution?

Conclusion

Perplexity’s $750 million agreement with Microsoft is a landmark moment for AI startups exploring advanced cloud partnerships.

By running frontier AI models on Azure while keeping AWS as its main provider, Perplexity demonstrates the benefits of a multi-cloud strategy.

The deal offers access to state-of-the-art AI models, scalability, and enhanced industry credibility, giving the company a strong foundation for future growth.

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FAQ

What is the Perplexity Microsoft cloud deal?

Perplexity signed a $750 million agreement to use Microsoft’s Azure cloud services to run AI models from OpenAI, Anthropic, and xAI.

Will Perplexity stop using AWS because of the Microsoft deal?

No, AWS remains the startup’s primary cloud provider, and Perplexity continues to maintain investments and operations there.

What models can Perplexity run on Azure?

The startup can access frontier AI models from OpenAI, Anthropic, and xAI through Microsoft’s Foundry platform.

Why did Amazon sue Perplexity?

Amazon filed a complaint regarding Perplexity’s shopping automation feature, claiming it accessed Amazon accounts without proper authorization.

How does this deal affect the AI startup ecosystem?

It highlights the trend of AI startups using multi-cloud strategies to access advanced tools, reduce dependency on a single provider, and increase innovation.

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