Perplexity strikes cloud deal with Microsoft amid conflict with Amazon

AI startup Perplexity has struck a $750 million deal with Microsoft to use the cloud service from the American bigtech - Azure AI Foundry, Bloomberg reports citing sources. Thus Perplexity will be able to expand its infrastructure beyond its longtime partner Amazon, the agency notes.

Perplexity is currently one of the most highly valued AI startups on the market: In October last year, it managed to attract $500 million in investment, bringing the total value of the company to about $9 billion, The Wall Street Journal wrote.

The three-year agreement with Microsoft will allow Perplexity to use Azure AI Foundry as an intermediary platform to work with AI models from different companies, including OpenAI, Anthropic and xAI developments, Bloomberg noted. In doing so, the AI company did not reallocate costs with Amazon Web Services (AWS), which has long been Perplexity's primary cloud provider, a spokesperson for the AI startup noted. "AWS remains the preferred cloud infrastructure provider for Perplexity, and we will be announcing an expansion of this partnership in the coming weeks," he noted (quoted by Bloomberg).

Microsoft and Amazon declined to comment to Bloomberg on their cooperation with Perplexity. Microsoft shares added 0.54% on the pre-market on January 30. Amazon, on the contrary, decreased by 0.48%.

For Microsoft, the deal with Perplexity strengthens Azure's positioning as a platform for creating AI applications and deploying multi-vendor models, according to Bloomberg. Microsoft's Azure cloud capacity has been used for several years by OpenAI, and since November last year by another AI startup Anthropic.

Large AI companies typically lease cloud capacity from multiple partners - this gives access to unique services and reduces dependence on a single provider, Bloomberg explains. However, much of Perplexity's business was built on AWS. The company used Amazon's Bedrock service to access Anthropic models in its search product. Perplexity CEO Aravind Srinivas has repeatedly spoken at AWS conferences and stated that he decided to "bet exclusively on the Amazon cloud." In turn, AWS cited Perplexity as an example of an advanced AI client.

However, in recent months, a legal dispute has erupted between the companies. Last November, Amazon filed a lawsuit against Perplexity, trying to prevent the startup from allowing users to buy goods on the company's online marketplace using AI tools. In response, Perplexity said Amazon's actions were a "threat to users' freedom of choice," Bloomberg recalls.

This article was AI-translated and verified by a human editor