Perplexity signs major Azure cloud deal with Microsoft amid shifting AI landscape

Perplexity, the fast-growing AI startup best known for its answer-focused search product, has signed a $750 million agreement with Microsoft to use its Azure cloud services, according to a recent Bloomberg report. The deal marks one of the largest cloud commitments by an emerging AI company this year and highlights how competition among cloud providers is intensifying as demand for advanced AI models grows.

The three-year agreement will allow Perplexity to access a wide range of AI models through Microsoft’s Foundry program. These include systems developed by OpenAI, Anthropic, and xAI, giving the startup flexibility to choose from some of the most widely discussed large language models in the market today. A Microsoft spokesperson confirmed to Reuters that Perplexity has selected Microsoft Foundry as its primary platform for “model sourcing,” signalling a deeper technical collaboration between the two companies.

At the same time, Perplexity has been careful to clarify that this move does not represent a full shift away from its existing cloud setup. A spokesperson for the company told Bloomberg that the partnership is focused on gaining access to leading AI models rather than replacing its core infrastructure. Perplexity continues to rely on Amazon Web Services as its main cloud provider, suggesting a multi-cloud strategy that many AI startups are now adopting to manage costs, performance, and risk.

The timing of the Microsoft deal is notable. According to a Reuters report, it comes after Amazon filed a lawsuit against Perplexity last year related to an automated shopping feature. Amazon alleged that the feature covertly accessed customer accounts, an accusation that drew attention to how AI tools interact with e-commerce platforms and user data. Perplexity has not publicly accepted those claims, and the case has added a layer of legal complexity to the company’s rapid expansion.

Industry observers see the Azure agreement as part of Microsoft’s broader effort to position itself as a neutral platform for AI development, offering access to multiple model providers rather than pushing a single system. For Perplexity, the deal provides scale and optionality at a time when demand for reliable, high-performance AI services is rising sharply.

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As the AI sector matures, partnerships like this underline how startups are balancing innovation with infrastructure realities. For now, Perplexity appears focused on expanding its capabilities while keeping its options open, reflecting the cautious but ambitious approach shaping today’s AI market.