Perplexity Secures $750 Million Microsoft Azure Deal in Strategic Cloud Pivot

Executive Summary

LONDON, January 30, 2026 — Perplexity, the artificial intelligence search startup valued at approximately $20 billion, has signed a landmark three-year cloud computing agreement with Microsoft Azure worth $750 million, according to a report by Bloomberg. The deal represents a strategic multi-cloud expansion for the San Francisco-based company, which will leverage Microsoft's Foundry platform to access frontier AI models from OpenAI, Anthropic, and xAI.

The agreement comes amid an ongoing legal dispute with Amazon, which sued Perplexity in November 2025 over its agentic shopping feature. Despite the litigation, Perplexity has emphasised that AWS remains its primary cloud infrastructure provider, with a spokesperson confirming that no spending will shift from Amazon's platform as a result of the Microsoft partnership.

Key Takeaways

• Perplexity has committed $750 million over three years to Microsoft Azure, representing one of the largest cloud deals by an AI startup in 2026.
• The company will use Microsoft Foundry as its primary AI platform for model sourcing, gaining access to frontier models from multiple providers.
• AWS remains Perplexity's preferred cloud infrastructure provider, with the company planning to announce partnership expansions in the coming weeks.
• Microsoft reported that customers spending $1 million or more per quarter on Foundry grew approximately 80 per cent in Q4 2025.
• The deal positions Perplexity alongside over 1,500 Microsoft Foundry customers already using both OpenAI and Anthropic models.
• Perplexity's valuation reached approximately $20 billion following a $200 million funding round in September 2025.

Deal Structure and Strategic Rationale

The $750 million agreement, structured over a three-year period, marks Perplexity's formal entry into a multi-cloud architecture. Under the terms, the company will utilise Azure cloud services alongside Microsoft Foundry, which serves as a centralised platform for accessing AI models from competing providers.

Perplexity Cloud Partnership Comparison - Investments 2026

Provider	Status	Deal Value	Duration	Primary Use Case
Microsoft Azure	New (January 2026)	$750 million	3 years	AI model sourcing via Foundry
Amazon Web Services	Ongoing Primary	Hundreds of millions committed	Ongoing	Core cloud infrastructure

Microsoft confirmed the strategic significance of the partnership, stating that "Perplexity has chosen Microsoft Foundry as its primary AI platform for model sourcing." The arrangement allows Perplexity to access models from OpenAI, Anthropic, and Elon Musk's xAI through a single platform, reducing the complexity of managing multiple AI vendor relationships.

According to Silicon Republic, the deal reflects a broader industry trend among AI startups to diversify cloud providers. Companies are increasingly seeking to limit reliance on single vendors while accessing unique services and model ecosystems that each provider offers.

AWS Partnership Remains Intact

Despite the substantial Microsoft commitment, Perplexity has moved to reassure its existing cloud partner. A company spokesperson told reporters that "AWS remains Perplexity's preferred cloud infrastructure provider," adding that the company is "excited to announce expansions of that partnership in the coming weeks."

Chief executive Aravind Srinivas had previously described Perplexity as being "all-in" on AWS, with the company having made commitments worth "hundreds of millions" to Amazon's cloud division, according to statements made in November 2025. Perplexity uses Amazon Bedrock to access Anthropic's Claude models for its AI search engine.

Market Context and Competitive Landscape

The partnership arrives at a critical juncture for the AI infrastructure market. Microsoft has been aggressively positioning Azure as the preferred platform for enterprises deploying AI applications, with Foundry serving as a key differentiator by offering access to models from competing AI laboratories.

Major AI Cloud Deals in 2025-2026 - Investments 2026

Company	Cloud Provider	Deal Value	Announced	Valuation at Time
Perplexity	Microsoft Azure	$750 million	January 2026	$20 billion
OpenAI	Microsoft Azure	Multi-billion	Ongoing	$157 billion
Anthropic	Amazon AWS	$4 billion	2023-2024	$61 billion

The competitive dynamics between cloud providers have intensified as AI startups command substantial infrastructure commitments. According to TechZine, enterprises are increasingly adopting multi-cloud strategies to ensure business continuity, access diverse capabilities, and maintain negotiating leverage with providers.

Legal Tensions with Amazon

The Microsoft deal unfolds against the backdrop of legal proceedings between Perplexity and Amazon. In November 2025, Amazon filed suit alleging that Perplexity's agentic shopping feature covertly accessed Amazon customer accounts and disguised automated activity as human browsing.

Perplexity has vigorously contested the allegations, with the company characterising Amazon as "a bully" and describing the lawsuit as "a threat to user choice." The legal dispute has not, according to Perplexity, affected its commercial relationship with AWS.

Industry Implications

The deal carries broader implications for the AI infrastructure market. Microsoft's ability to attract a high-profile AI startup despite Amazon's substantial investments in the sector demonstrates the appeal of its multi-model Foundry approach. For investors and enterprise buyers alike, the arrangement signals that AI companies may increasingly pursue hybrid cloud strategies rather than exclusive partnerships.

Perplexity competes directly with Google, OpenAI, and other technology giants in the AI-powered search market. Having raised less capital than OpenAI ($20 billion valuation versus $157 billion) and Anthropic ($61 billion), strategic infrastructure partnerships are critical for Perplexity's ability to scale its services competitively.

Forward Outlook

The Perplexity-Microsoft agreement represents a watershed moment in AI infrastructure dealmaking. As frontier AI models become commoditised and accessible through platforms like Microsoft Foundry, competitive differentiation may increasingly depend on how effectively companies integrate multiple model providers rather than exclusive relationships with single vendors.

Market observers anticipate that Perplexity's dual-cloud strategy — Azure for diverse model access and AWS for core infrastructure — could become a template for other AI startups seeking to balance strategic partnerships with operational flexibility. The coming weeks will reveal whether the promised AWS partnership expansions materialise and how the Amazon litigation progresses.

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References

• Bloomberg: Perplexity Inks Microsoft AI Cloud Deal Amid Dispute With Amazon
• Business Standard: Microsoft signs $750 million Azure cloud deal with AI firm Perplexity
• Silicon Republic: Perplexity inks $750m deal with Microsoft to use Azure cloud
• TechZine: Perplexity expands cloud strategy with Azure alongside AWS
• Yahoo Finance: Microsoft Inks $750 Million Cloud Deal with AI Firm Perplexity
• Perplexity Blog: Perplexity collaborates with Amazon Web Services