Allen had said earlier this month that he had started treatment for non-Hodgkin’s lymphoma, the same type of cancer he overcame nine years ago.
Born in Seattle, Allen attended Washington State University for two years before dropping out to co-found Microsoft in 1975 with Bill Gates, a friend of his from high school.
Allen, who left Microsoft in 1983, set up investment firm Vulcan Inc in 1986 to manage his multibillion-dollar portfolio.
“Paul Allen’s contributions to our company, our industry and to our community are indispensable,” Microsoft Chief Executive Officer Satya Nadella said in a statement.
“As co-founder of Microsoft, in his own quiet and persistent way, he created magical products, experiences and institutions, and in doing so, he changed the world.”