Microsoft inks $750M deal with Perplexity to boost AI efforts
What's the story
Microsoft has signed a three-year, $750 million deal with artificial intelligence (AI) start-up Perplexity. The agreement will see Perplexity use Microsoft's Azure cloud service for deploying AI models via the Foundry service. This includes those developed by OpenAI, Anthropic, and xAI. A spokesperson for Perplexity expressed their excitement about the partnership and access to frontier models from these companies.
Cloud commitment
Perplexity's cloud strategy remains unchanged
Despite the new deal with Microsoft, Perplexity has not shifted its spending from Amazon Web Services (AWS), which has been its primary cloud provider. The spokesperson said that AWS continues to be Perplexity's preferred cloud infrastructure provider and hinted at upcoming expansions of their partnership in the coming weeks. This multi-cloud strategy is common among big companies to access unique services and reduce dependency on a single vendor.
Business evolution
Legal battle between Amazon and Perplexity
Perplexity has built much of its business on AWS, using Amazon's Bedrock service to access Anthropic models for its search engine. However, the two companies have been embroiled in a legal dispute recently. In November, Amazon sued Perplexity to prevent it from allowing consumers to use its AI tools for shopping on the Seattle-based company's online marketplace.
Strategic move
Microsoft's push for Azure as AI model deployment platform
The deal with Perplexity is a major step in Microsoft's strategy to make Azure the go-to platform for building AI apps and deploying models from various vendors. Microsoft has been offering models from its partner OpenAI and recently struck a deal with Anthropic for the same. "Our customers expect to use multiple models as part of any workload," said Microsoft CEO Satya Nadella during an earnings call earlier this week.