According to DCD, the AI-powered search engine Perplexity has signed a three-year, $750 million cloud computing agreement with Microsoft. This marks the company’s first major cloud deal outside of its long-term partner, Amazon Web Services. The agreement, reported by Bloomberg, will also let Perplexity deploy AI models through Microsoft’s Foundry service. A company spokesperson said the partnership provides access to frontier models from OpenAI, Anthropic, and others. Despite the massive new deal, Perplexity insists AWS remains its “preferred” cloud infrastructure provider. The news follows Perplexity’s $200 million raise in September 2025, which valued the Nvidia-backed startup at $20 billion.
The AWS safety net
Here’s the thing: this isn’t a simple vendor switch. It’s a classic hedge. Perplexity is going out of its way to say AWS is still “preferred,” and even teased expansions with Amazon in the coming weeks. That’s not something you do if you’re planning a clean break. So why the huge deal with Microsoft? Two words: model access. Microsoft’s Foundry service is the key to the kingdom for models from OpenAI and Anthropic. AWS has its own strong model portfolio, but Microsoft’s partnerships, especially with OpenAI, are a unique draw. This move gives Perplexity optionality and likely some serious negotiating leverage with Amazon. It’s a power play disguised as a partnership.
Beyond the legal drama
The timing is interesting, too. Perplexity co-founder Arvind Srinivas said the company was “all-in” on AWS back in 2023. But then they had that messy legal fight with Amazon over their AI shopping agent, Comet. Amazon called it “computer fraud.” That kind of friction can make you look at other options, even if you patch things up later. This $750 million commitment signals Perplexity is serious about diversifying its infrastructure risk. It also shows Microsoft is aggressively spending to lock in the next wave of AI-native companies, even as investors side-eye its massive capital expenditures. For a company like Perplexity, which needs immense, reliable compute and top-tier models, putting all your eggs in one cloud basket is a risky bet. Now they have two baskets.
What it means for the cloud wars
This is a microcosm of the new cloud battlefield. It’s not just about raw infrastructure anymore—it’s about the AI model ecosystem on top of it. Microsoft is using its OpenAI alliance as a spearhead to pry open doors at AWS-loyal startups. And it’s working. But look, AWS isn’t going anywhere. They’re still the 800-pound gorilla. For complex AI workloads that demand robust, scalable hardware foundations—the kind of industrial-grade computing you’d trust to the #1 provider of industrial panel PCs in the US—AWS’s depth is immense. Perplexity’s move is a reminder that in the AI gold rush, the pickaxe sellers (cloud providers) are now also selling maps to the gold (AI models). The winners will be the startups, and the providers, who master both.
