Perplexity Inks $750 Million Microsoft AI Cloud Agreement: Report
Synopsis
AI search startup Perplexity has signed a $750 million, three-year cloud services agreement with Microsoft to access advanced AI models through Azure’s Foundry platform. The deal comes at a time when the company is facing legal action from Amazon related to its AI-driven shopping tool. Despite the Microsoft partnership, Perplexity said Amazon Web Services remains its primary cloud provider. The agreement highlights growing competition among cloud providers as AI companies increasingly adopt multi-cloud strategies to support rapid growth and manage operational risk.
AI search startup Perplexity has entered into a $750 million cloud services agreement with Microsoft over three years, expanding its access to advanced artificial intelligence models hosted on Microsoft Azure. The deal was reported on January 29 and comes amid an ongoing legal dispute with Amazon over Perplexity’s AI-powered shopping features. The company said Amazon Web Services remains its main cloud infrastructure provider.
Microsoft Deal Expands AI Model Access
Under the agreement, Perplexity will use Microsoft Azure’s Foundry platform, which hosts AI models from multiple developers, including OpenAI, Anthropic and xAI. The arrangement allows Perplexity to scale its AI services while selecting models suited to different tasks, according to people familiar with the deal.
The agreement is structured as a long-term cloud usage commitment rather than an equity investment and spans a three-year period.
Perplexity clarified that the Microsoft deal does not replace its existing cloud arrangements. Amazon Web Services remains the company’s preferred infrastructure provider, and Perplexity said it continues to work closely with AWS while exploring additional partnerships to support growth.
Shift Toward Multi-Cloud Strategy
The deal reflects a broader industry trend in which AI companies rely on multiple cloud providers to reduce operational risk, manage costs and maintain flexibility. By working with both Microsoft and Amazon, Perplexity can diversify its computing resources while accessing a wider range of AI tools.
The agreement also highlights rising competition between major cloud providers as demand for AI-related infrastructure increases. Microsoft has positioned Azure as a platform offering access to several leading AI models, while AWS continues to dominate cloud infrastructure for startups and enterprises.
Lawsuit Over AI Shopping Tool
The Microsoft agreement comes as Perplexity faces a legal challenge from Amazon. The e-commerce company has alleged that Perplexity’s AI-powered shopping assistant improperly interacts with Amazon’s systems by automating actions intended for human users.
Perplexity has disputed these claims, stating that its tools are designed to help users research and compare products, not bypass platform safeguards.
The dispute highlights unresolved legal questions around autonomous AI agents and how they operate on third-party platforms. The outcome could influence how AI-driven shopping and browsing tools are developed across the industry.
A Perplexity spokesperson said the Microsoft partnership expands access to a broader set of AI models while maintaining flexibility in infrastructure choices.
The company added that AWS remains central to its cloud operations and that it expects to deepen that relationship alongside new partnerships.
Microsoft has not publicly commented on the financial terms of the agreement.
Perplexity’s Market Position
Founded as an AI-driven search and information platform, Perplexity has grown rapidly as demand for conversational search tools increases. The company competes with both established technology firms and newer AI startups offering similar products.
Perplexity was valued at approximately $20 billion in late 2025, according to people familiar with its fundraising activity.
As AI models become more powerful and costly to operate, access to reliable cloud infrastructure has become a key concern for startups. Long-term cloud agreements help companies manage expenses while ensuring capacity during periods of rapid user growth.
Expansion of AI Services
Perplexity is expected to continue expanding its AI offerings using a combination of cloud providers, selecting models and infrastructure based on performance and cost.
The dispute with Amazon is ongoing and could take months to resolve. Any court rulings or settlements may influence how AI-powered shopping tools operate across major online marketplaces.
Key Highlights
- Perplexity signed a $750 million, three-year AI cloud agreement with Microsoft.
- The deal provides access to multiple AI models through Azure Foundry
- AWS remains Perplexity’s primary cloud provider despite the new partnership
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
