Perplexity signs $750 million Azure cloud deal with Microsoft

AI search start-up Perplexity has agreed a three-year, $750 million deal with Microsoft to use the company’s Azure cloud platform, according to reports. The agreement allows Perplexity to deploy AI models through Microsoft’s Foundry services, including systems developed by OpenAI, Anthropic and xAI.

The partnership strengthens Microsoft’s push to position Azure as a central platform for building AI applications. Perplexity said the deal does not signal a complete shift away from Amazon Web Services, which remains its preferred cloud provider, and added that further expansions of its relationship with AWS are expected.

Founded in 2022, Perplexity has grown rapidly and was valued at $20 billion following a $200 million funding round last year. The company competes directly with Google by offering conversational answers to search queries, a model that has drawn attention and controversy across the search and publishing industries.

Perplexity has faced legal and regulatory challenges as it expands. Media organisations, including the BBC and The New York Times, have accused the company of scraping content to train AI models.

At the same time, Amazon has alleged improper use of its systems in connection with Perplexity’s AI shopping tools. The deal with Microsoft comes as competition intensifies over cloud infrastructure, AI deployment and the future of search.

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