In a significant move to diversify its compute infrastructure, AI-powered search engine Perplexity AI signed a $750 million cloud services agreement with Microsoft on Friday, January 30, 2026.
The three-year deal establishes a multi-cloud strategy for the startup, which has historically relied almost exclusively on Amazon Web Services (AWS). Through this partnership, Perplexity will gain access to Microsoft’s Foundry service, allowing it to run and scale a broad portfolio of frontier models on Azure.
1. The Deal: Breaking the “All-In” AWS Stance
The agreement marks a strategic pivot for Perplexity CEO Aravind Srinivas, who famously stated in 2023 that the company was going “all-in” on Amazon’s cloud.
- Three-Year Commitment: The $750 million contract is structured over 36 months, providing Perplexity with dedicated Azure capacity.
- Access to “Foundry”: A key pillar of the deal is Microsoft’s Foundry service. This allows Perplexity to deploy models not just from Microsoft, but also from leaders like OpenAI, Anthropic, and Elon Musk’s xAI.
- Foundry Momentum: Microsoft CEO Satya Nadella recently noted that Foundry usage is surging, with over 1,500 customers already using it to run multi-vendor model workloads.
2. The “Amazon Friction” Context
The shift to Microsoft comes amid intensifying legal and competitive tensions between Perplexity and its longtime partner, Amazon.
- The Shopping Lawsuit: In November 2025, Amazon sued Perplexity, alleging that the startup’s “agentic” shopping tools were unauthorizedly accessing Amazon customer accounts and scraping pricing data.
- The “Bully” Response: Perplexity responded by labeling Amazon a “bully” and a threat to consumer choice.
- Maintaining the Peace: Despite the new Microsoft deal, Perplexity clarified that AWS remains its “preferred cloud infrastructure provider” and that the Azure deal is an expansion, not a total replacement of its Amazon commitments.
3. Strategic Rationale: Resilience and Choice
By partnering with Microsoft, Perplexity is following a “best-of-breed” multi-cloud strategy common among 2026 AI unicorns.
| Strategy Component | Benefit for Perplexity |
| Model Diversity | Access to OpenAI (via Azure) and xAI models to supplement the Anthropic models it uses on AWS Bedrock. |
| Compute Redundancy | Protecting against capacity shortages at any single cloud provider as search query volumes grow. |
| Foundry Pricing | Leveraging Microsoft’s “pay-per-token” billing for enterprise-grade frontier models. |
| Geographic Reach | Utilizing Microsoft’s recently approved 15 new data centers in the U.S. to lower latency. |
4. Market Impact: Azure as the “Universal Hub”
For Microsoft, the Perplexity deal is a major win in its effort to position Azure as a neutral platform where developers can use any model, regardless of whether it’s an internal partner (OpenAI) or a competitor (Anthropic).
- The “Anti-Lock-in” Play: Microsoft is successfully marketing Azure to startups that want to avoid being locked into a single ecosystem like AWS or Google Cloud.
- Financial Rebound: This announcement provided a slight boost to Microsoft’s sentiment after its stock fell 10% earlier this week due to cooling Azure growth guidance.
Conclusion: A New Chapter in AI Search
The $750 million Azure deal signals that Perplexity is maturing from a boutique search tool into a massive infrastructure consumer. By securing nearly a billion dollars in compute across both Amazon and Microsoft, the company is preparing for a 2026 showdown with Google. For the broader industry, it reinforces a new reality: in the age of AGI, the most successful startups won’t be “all-in” on one cloud, but rather “all-in” on wherever the best tokens are available.
