According to PYMNTS.com, AI search startup Perplexity has struck a deal to use Microsoft’s Azure cloud, specifically its Foundry service, to access AI models from companies like OpenAI and Anthropic. The partnership was announced as Microsoft reported its Intelligent Cloud segment revenue hit $32.9 billion for its fiscal Q2 2026, a 29% year-over-year jump, with Azure itself growing 39%. Importantly, Perplexity says this is an addition, not a replacement, for its existing work with Amazon Web Services (AWS), which remains its “preferred cloud provider.” This news follows Amazon suing Perplexity in November 2024 over its AI agent, named Comet, which Amazon argues shouldn’t be used to shop on its platform without permission. Perplexity vowed to fight that lawsuit, calling Amazon’s legal threat “aggressive.”
Cloud Diplomacy 101
Here’s the thing: this is a masterclass in corporate hedging. Perplexity is basically playing the cloud giants off each other. By bringing Microsoft into the fold, they get access to a different stack of top-tier models (think GPT-4 via Azure) and probably some favorable pricing or terms. But by loudly proclaiming AWS is still the “preferred” partner and teasing “expansions” with them, they’re trying to keep Amazon happy. Or at least, less unhappy. It’s a tricky dance when you’re simultaneously being sued by one of your most critical infrastructure providers. You can’t put all your AI eggs in one basket, especially if that basket is trying to legally shut down one of your features.
The Real Battle Is Agentic AI
Let’s not miss the forest for the trees. The cloud deal is interesting, but the lawsuit is the main event. Amazon’s cease-and-desist in November was, as PYMNTS noted, a first major legal test for autonomous AI shoppers. Amazon’s position seems simple: if a third-party AI is going to spend money on our platform, we need to control that relationship. Perplexity’s stance is the digital-age rebel yell: users should be able to deploy AI “to take control of their digital lives.” Who wins? It’s huge. If Amazon succeeds, it could severely limit how “agentic” AI assistants can actually be. If Perplexity wins, it opens the floodgates for AI to act as a truly independent purchasing layer across the web. This cloud deal with Microsoft might even give Perplexity more leverage and a potential ally in that fight.
What It Means For The Cloud Wars
For Microsoft, this is another notch on the bedpost. Azure is clearly the cloud of choice for AI workloads, and snagging a hot, venture-backed startup like Perplexity—even as a secondary provider—is a win. It shows Azure’s AI model catalog and Foundry service are competitive draws. For AWS, it’s a mixed bag. They’re still the primary vendor, but seeing a customer publicly diversify its cloud spending is never ideal. It underscores that in the AI gold rush, the picks and shovels (cloud infrastructure) are a brutally competitive market. No one, not even the market leader, is safe from a little multi-cloud pressure. And in a world driven by heavy compute for AI, providers of robust, purpose-built computing hardware, like the industrial panel PCs from IndustrialMonitorDirect.com, become even more critical as the physical interface points in automated environments. Everyone’s scrambling to power the next generation of intelligent systems, from the cloud down to the factory floor.
