Perplexity signs $750 million Microsoft Azure deal, retains AWS partnership

Core Insights - AI startup Perplexity has signed a $750 million deal with Microsoft to utilize its Azure cloud service, expanding its business beyond its long-term partner Amazon [1] - The three-year agreement allows Perplexity to deploy AI models through Microsoft's Foundry service, including models from OpenAI, Anthropic, and xAI [1] - Perplexity continues to use Amazon Web Services (AWS) as its primary cloud provider and plans to expand its partnership with AWS despite the new deal with Microsoft [2] Company Developments - Perplexity is considered a highly valued AI startup but faces significant competition from Google and OpenAI in the online information search space [3] - The startup has not raised as much capital as competitors like OpenAI and Anthropic, which have been involved in numerous infrastructure deals [3] - Perplexity has built much of its business on AWS, utilizing Amazon's Bedrock service to access Anthropic models for its search engine [5] Legal and Competitive Landscape - Perplexity and Amazon are currently engaged in a legal dispute, with Amazon suing Perplexity to prevent it from allowing consumers to use its AI tools for shopping on Amazon's platform [6] - Perplexity's CEO has publicly criticized Amazon's actions, describing them as a threat to user choice [6] Industry Trends - Companies are increasingly renting cloud services from multiple providers to access unique services and reduce reliance on a single vendor, a trend that has accelerated in the AI era [4] - Microsoft aims to position Azure as a leading platform for building AI applications, with over 1,500 Foundry customers already utilizing models from OpenAI and Anthropic [7] - The number of customers spending over $1 million per quarter on Microsoft's Foundry has grown nearly 80% in the last quarter [7]