AI-powered search startup Perplexity has entered into a significant US$750 million, three-year cloud service agreement with Microsoft. The deal will see the rapidly growing startup leverage Microsoft’s Azure platform to power its advanced AI models.
This move marks a notable expansion of Perplexity’s infrastructure strategy, which has historically been centered on Amazon Web Services (AWS).
A Strategic Shift to a Multi-Cloud Approach
While Perplexity has been a prominent AI customer for AWS, this new agreement with Microsoft diversifies its cloud dependencies. According to the company, it has not yet shifted its spending from AWS, which currently remains its primary cloud provider.
Perplexity’s CEO, Aravind Srinivas, has previously emphasized the company’s strong reliance on AWS. The startup has clarified that it plans to expand its existing AWS partnership alongside this new Azure agreement, adopting a multi-cloud strategy to optimize performance and access a wider range of resources.
Azure’s Growing AI Foundry
The partnership allows Perplexity to access a suite of powerful large language models through Microsoft’s Azure Foundry service. This includes models from industry leaders such as OpenAI, Anthropic, and Elon Musk’s xAI, providing Perplexity with enhanced flexibility and capabilities for its conversational search engine.
The deal underscores Microsoft’s broader strategy to position Azure as the premier cloud platform for AI development, attracting top-tier AI companies by offering a diverse, multi-vendor model marketplace.
Relevance for MENA’s AI Ecosystem
This major deal in the global AI landscape offers several key insights for founders and investors in the MENA region. Firstly, it highlights the immense computational costs required to scale a competitive AI product, underscoring the importance of strategic cloud partnerships for regional startups.
Secondly, it showcases the trend of AI companies adopting multi-cloud strategies to de-risk operations and access best-in-class models from different providers. As MENA startups build their own AI solutions, avoiding vendor lock-in with a single cloud provider will be a critical consideration. Finally, with major cloud providers like Microsoft continuing to invest heavily in data centers across the UAE and Saudi Arabia, this deal signals the increasing competition and attractive offerings that will become available to the region’s burgeoning AI ecosystem.
About Perplexity
Perplexity is an AI-chat-based conversational search engine that answers queries using natural language predictive text. The platform serves as an “answer engine,” providing direct, sourced answers to user questions, distinguishing itself from traditional search engines by synthesizing information from multiple sources into a single, cohesive response.
Source: Tech in Asia
