In a significant move to strengthen its artificial intelligence cloud ecosystem, Microsoft has entered into a major partnership with AI start-up Perplexity, expanding access to advanced AI models on its cloud platform.
Microsoft has signed a 3-year deal worth $750 million with Perplexity. Under the agreement, Perplexity will use Microsoft’s Azure cloud to deploy AI models through the Foundry service. This includes models developed by OpenAI, Anthropic, and xAI. A spokesperson for Perplexity said the company is excited about the partnership and the opportunity to access frontier AI models from these providers.
Despite the agreement with Microsoft, Perplexity confirmed that its cloud strategy has not changed. Amazon Web Services remains its primary cloud infrastructure provider. The spokesperson said AWS continues to be the company’s preferred platform and added that further expansion of the AWS partnership is expected in the coming weeks.
Using more than 1 cloud provider is a common approach among large technology companies. This allows access to specialized services while reducing reliance on a single vendor.
Perplexity has built a large part of its operations on AWS, using Amazon’s Bedrock service to access Anthropic models for its AI-powered search engine. However, the relationship between the 2 companies has recently faced legal challenges.
In November, Amazon filed a lawsuit against Perplexity, seeking to stop the company from allowing users to use its AI tools for shopping on Amazon’s online marketplace.
The deal with Perplexity supports Microsoft’s broader plan to position Azure as a leading platform for building AI applications and deploying models from multiple vendors. Microsoft already offers OpenAI models on Azure and has recently signed an agreement with Anthropic to host its models as well.
“Our customers expect to use multiple models as part of any workload,” said Microsoft CEO Satya Nadella during an earnings call earlier this week.
The partnership highlights the intensifying competition among cloud providers to become the preferred destination for AI development and deployment.
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