Perplexity secures $750 million Microsoft cloud pact amid Amazon legal feud

AI search startup diversifies infrastructure with three-year azure deal, gaining access to "frontier models" from OpenAI, Anthropic, and xAI.

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In a major strategic shift that highlights the increasingly complex alliances of the AI era, Perplexity AI has signed a $750 million, three-year cloud agreement with Microsoft. Reported on January 30, 2026, the deal allows the high-growth search startup to utilize Microsoft Azure AI Foundry as a secondary infrastructure hub.

The move is seen as a "redundancy play" by Perplexity, which remains locked in a high-profile legal battle with its primary cloud provider, Amazon, over its controversial "agentic" shopping tools.

The "foundry" advantage: A multi-model hub

The core of the agreement centers on Microsoft Azure AI Foundry (formerly Azure AI Studio). This platform will allow Perplexity to do something it couldn't easily do elsewhere: access and manage a diverse library of "frontier" models from multiple competing vendors under one roof.

Perplexity will now be able to run and swap between models from OpenAI, Anthropic, and xAI, as well as Meta’s open-source Llama series, depending on the specific search query or user task.

By establishing a $750 million foothold in Azure, Perplexity is protecting itself against potential service disruptions or punitive actions from Amazon, which currently hosts the majority of its workloads.

The deal also provides the massive compute power necessary for Perplexity’s "Pro" features, which require more intensive reasoning and multi-step information retrieval than standard search.

The "AWS first" disclaimer

Despite the massive scale of the Microsoft deal, Perplexity is treading carefully to avoid a total fallout with Amazon Web Services (AWS).

"AWS remains Perplexity's preferred cloud infrastructure provider," a spokesperson told Bloomberg. "We have not shifted spending away from AWS, and we are excited to announce expansions of that partnership in the coming weeks."

This "multi-cloud" stance is becoming the standard for top-tier AI startups. By refusing to be "locked in" to a single provider, Perplexity maintains maximum leverage in a market where GPU capacity and cloud credits are as valuable as cash.

Escalating tensions with Amazon

The deal arrives against the backdrop of a federal lawsuit filed by Amazon in November 2025. Amazon is seeking to block Perplexity's "Comet" browser agent, which facilitates automated shopping. Amazon alleges the tool "masks automated activity as human browsing" and violates its marketplace terms of service.

Perplexity has fired back, calling Amazon a "bully" and framing the legal action as a threat to consumer freedom. For Microsoft, this tension represents a golden opportunity to peel away one of AWS's most high-profile and fastest-growing AI customers.

A win for Azure’s "multi-vendor" pitch

For Microsoft CEO Satya Nadella, the Perplexity deal is a validation of his strategy to turn Azure into more than just "the OpenAI cloud." By hosting Anthropic and xAI models alongside OpenAI, Microsoft is positioning Azure as the neutral "central terminal" of the AI industry.

During a recent earnings call, Nadella noted that customers spending over $1 million per quarter on Foundry grew nearly 80% in late 2025, suggesting that the industry is moving toward the exact type of multi-model architecture Perplexity is now adopting.