Perplexity signs $750 million AI cloud deal with Microsoft for frontier models access

Perplexity signs $750 million AI cloud deal with Microsoft, Bloomberg News reports

Jan 29 (Reuters) - AI startup Perplexity has signed a $750 million agreement with Microsoft (MSFT.O), opens new tab to use its Azure cloud service, Bloomberg News reported on Thursday, citing people familiar with the matter. The three-year deal will allow Nvidia (NVDA.O), opens new tab-backed Perplexity to run a range of AI models through Microsoft's Foundry program, including systems from OpenAI, Anthropic and xAI, the report said. "Perplexity has chosen Microsoft Foundry as its primary AI platform for model sourcing under a new multi-year agreement," a Microsoft spokesperson told Reuters. Perplexity did not respond to a Reuters request for comment. A Perplexity spokesperson told Bloomberg News that it was partnering with Microsoft "for access to frontier models from X, OpenAI and Anthropic". The spokesperson told Bloomberg Perplexity has not shifted spending from Amazon Web Services, the startup's main cloud provider, as part of the Microsoft deal. Amazon (AMZN.O), opens new tab sued Perplexity last year over the startup's "agentic" shopping feature, which uses automation to place orders for users, saying it covertly accessed Amazon customer accounts and disguised automated activity as human browsing. Reporting by Mihika Sharma in Bengaluru; Editing by Pooja Desai and Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab

Perplexity inks $750m deal with Microsoft to use Azure cloud

AWS still remains Perplexity's preferred cloud provider, the start-up clarified. AI-powered search engine Perplexity has signed a three-year, $750m deal with Microsoft to use its Azure cloud service, Bloomberg has reported. Sources told the publication that the deal will enable Perplexity to deploy AI models through Microsoft's Foundry services, including those from OpenAI, Anthropic and xAI. Perplexity has been a long-term user of Amazon Web Services (AWS), and the company told Bloomberg that AWS remains its "preferred" cloud infrastructure provider. For Microsoft, this deal boosts its efforts to position Azure as the go-to place to build AI applications. "We are excited to partner with Microsoft for access to frontier models from X, OpenAI and Anthropic," a Perplexity spokesperson told the publication. "AWS remains Perplexity's preferred cloud infrastructure provider, and we're excited to announce expansions of that partnership in the coming weeks," they added. Founded in 2022 by Arvind Srinivas, Denis Yarats, Johnny Ho and Andy Konwinski, Perplexity was recently valued at $20bn after a $200m raise last September. The fast growing start-up had reportedly made a previous raise just months before. Perplexity is taking on the likes of Google by scraping the internet to provide conversational answers to search queries. And in doing so, the start-up has inevitably stepped on the toes of major corporations in the Search sector as well as content publishers. Despite going "all-in" on AWS, according to comments from Srinivas in 2023, Perplexity managed to engage itself in a legal fight with Amazon after the start-up allegedly allowed its AI browser agent Comet to make purchases for its users online. In its November lawsuit, Amazon alleged that Perplexity was committing "computer fraud" by failing to disclose when Comet is shopping on a real person's behalf. Although, companies such as Google and OpenAI are also attempting to make direct purchases through their AI chatbots possible, signalling a major shift in online purchasing trends. Meanwhile, in June, BBC threatened to take legal action against the company for allegedly scraping its content to train its AI models. In 2024, the New York Times sent Perplexity a 'cease and desist' notice, demanding that the start-up stop using its content for generative AI. Similar allegations of content scraping were made by tech magazine Wired and Forbes. Moreover, in the four short years since launching, Perplexity also managed to get delisted by Cloudflare - one of the largest internet security players - for stealth crawling for content by circumventing websites' network block. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Perplexity signs $750 million AI cloud deal with Microsoft, Bloomberg News reports

The three-year deal will allow Nvidia-backed Perplexity to run a range of AI models through Microsoft's Foundry program, including systems from OpenAI, Anthropic and xAI, the report said. AI startup Perplexity has signed a $750 ⁠million agreement with Microsoft to use its Azure cloud service, Bloomberg News reported on Thursday, citing people familiar with the matter. The three-year deal will allow Nvidia-backed Perplexity to run a range of AI models through Microsoft's Foundry program, including systems from OpenAI, Anthropic and xAI, the report said. "Perplexity has chosen Microsoft Foundry as its primary AI platform for model sourcing under a new multi-year agreement," a Microsoft spokesperson told Reuters. Perplexity did not respond to a Reuters request for comment. A Perplexity spokesperson told Bloomberg News that it was partnering with Microsoft "for access to frontier models from X, OpenAI and Anthropic". The spokesperson told Bloomberg Perplexity has not shifted spending from Amazon Web Services, the startup's main cloud provider, as part ⁠of the ⁠Microsoft deal. Amazon sued Perplexity last year over the startup's "agentic" shopping feature, which uses automation to place orders for users, saying it covertly accessed Amazon customer accounts and disguised automated activity as human browsing.

Perplexity Adds Microsoft's Azure as a Cloud Service Provider | PYMNTS.com

The deal will allow Perplexity to use Microsoft's Foundry service to access AI models, according to the report. "We are excited to partner with Microsoft for access to frontier models from X, OpenAI and Anthropic," a Perplexity spokesperson said, per the report. The deal with Microsoft will operate alongside the one Perplexity has with its longtime cloud partner Amazon Web Services, according to the report. The Perplexity spokesperson said the company has not shifted spending from AWS, that AWS remains the firm's preferred cloud provider, and that "we're excited to announce expansions of that partnership in the coming weeks." Amazon sued Perplexity in November in an attempt to stop the AI startup from letting consumers use its AI tools to shop on Amazon's marketplace, according to the report. PYMNTS reported at the time that Perplexity said in a Nov. 4 blog post that it received an "aggressive legal threat" from Amazon demanding that it prohibit the users of its Comet browser from using their AI assistants to shop on Amazon's platform. The startup said in its post that it will not be intimidated and will fight to ensure users can deploy agentic AI "to take control of their digital lives." On the same day, Amazon said in a statement posted in response to Perplexity that it thinks it is "fairly straightforward" that third-party applications offering to make purchases for customers from other businesses should respect businesses' decisions about whether to participate. PYMNTS reported Nov. 5 that Amazon's cease-and-desist letter against Perplexity marked the first major legal test over whether an autonomous AI agent has the right to act as a shopper on an eCommerce platform. Microsoft reported Wednesday (Jan. 28) that the revenue of its Intelligent Cloud segment rose 29% year over year in the second quarter of its fiscal 2026 to reach $32.9 billion, with Azure and other cloud services growing 39% in reported terms. PYMNTS reported at the time that while Microsoft does not break out AI revenue explicitly, Azure has become the primary delivery mechanism for large-scale AI workloads, from training foundation models to deploying inference at enterprise scale.

Microsoft Inks $750 Million Cloud Deal with Perplexity

Perplexity, which primarily used Amazon Web Services (AWS) previously, will now access models from OpenAI, Anthropic, and xAI through Microsoft's Foundry service. The company said it has not yet shifted spending from AWS, which remains its main cloud provider, and plans to expand its existing AWS partnership. Perplexity's CEO, Aravind Srinivas, has previously emphasized a strong reliance on AWS, which has highlighted the company as a notable AI customer. The deal aligns with Microsoft's strategy to position Azure as a leading platform for AI application development, offering models from multiple vendors. Implications, context, and why it matters. The $750 million commitment's fine print needs to be checked. The near-term value of Perplexity's three-year, $750 million commitment will be determined by the exact model access terms through Microsoft's Foundry service. The status of partner models such as Anthropic should be confirmed, since general availability versus a limited ?preview? affects whether they can be used for live workloads. The regions eligible for pay-per-token billing should be checked, since model providers can limit where usage is allowed. From these terms, it will be clear whether capacity is available now or mostly deferred to later. Multi-cloud AI can create a costly data-egress problem that private interconnects aim to address. Perplexity uses Amazon Web Services (AWS) plus Microsoft Azure, which can add network complexity and raise spend.