Microsoft Secures $750M AI Cloud Deal with Perplexity Amid Azure Growth Concerns
Microsoft Corp. signed a three-year, $750 million cloud agreement with AI startup Perplexity, granting access to frontier AI models through Azure's Foundry service. The deal strengthens Microsoft's position as a leading AI development platform, hosting models from OpenAI, Anthropic, and xAI.
Shares of Microsoft dropped 9.99% on January 29 after reporting slower Azure growth and weaker margin guidance for Q2 FY26. Wall Street analysts cut price targets post-earnings, though the stock maintains a Strong Buy consensus.
The Perplexity agreement exemplifies Microsoft's aggressive push to position Azure as the preferred infrastructure for high-growth AI startups. This comes as the tech giant faces legal challenges from Amazon Web Services, Perplexity's former cloud provider.
