Mistral AI Raises $645M And Reaches $6.2B In Valuation

Under the direction of General Catalyst, Mistral AI receives $645 million, increasing its valuation to $6.2 billion.

TakeAway Points:

  • Mistral AI, which is being run by General Catalyst and has Salesforce, Nvidia, and other partners involved, has received $645 million, bringing its worth to $6.2 billion.
  • The funding will expand commercial activities and computing resources for large-scale language model development by taking on AI behemoths like OpenAI.
  • The co-founders of DeepMind and Meta, who received praise for their capital efficiency from French President Emmanuel Macron, still hold the bulk of the company.

Mistral AI Gets Significant Investment

Mistral AI, a French artificial intelligence startup, has successfully raised €600 million ($645 million) in a new funding round, valuing the company at €5.8 billion ($6.2 billion). This significant investment was announced on Tuesday and led by venture capital firm General Catalyst, with participation from existing investors such as Lightspeed, Andreessen Horowitz, Bpifrance, and BNP Paribas. 

Corporate backers include Nvidia, Salesforce, Samsung, and IBM. The funding round also saw new participation from Yuri Milner’s DST Global. This latest round triples Mistral AI’s valuation since December, highlighting the growing investor confidence in the company’s potential to challenge established AI giants like OpenAI.

Arthur Mensch, co-founder and CEO of Mistral AI, expressed gratitude on social platform X, thanking both new and existing investors for their continued support. 

“This will accelerate our roadmap as we continue to bring frontier AI into everyone’s hands,” Mensch stated. 

The company aims to use the funds to scale up its commercial efforts and invest in additional computing resources, which are crucial for developing large language models (LLMs) that underpin applications like chatbots.

Market Position and Strategic Alliances

Mistral AI has positioned itself as a formidable competitor in the AI landscape, particularly in Europe. The company has garnered attention for its efficient use of capital and rapid growth. In February, Microsoft invested €15 million in Mistral as part of a commercial partnership to offer Mistral’s products through its Azure cloud computing platform. However, Microsoft did not participate in the latest funding round.

Mistral AI’s co-founders, Timothée Lacroix, Guillaume Lample, and Arthur Mensch, all former researchers at Google’s DeepMind and Meta, remain majority shareholders. 

Mensch emphasized the company’s disruptive potential, stating, “We showed that this wasn’t the case and we effectively disrupted the OpenAI business model.” 

The startup has been lauded by French President Emmanuel Macron as an example of how European startups can compete with major U.S. tech companies.

Future Plans

Mistral AI’s latest funding round consists of €468 million in equity and €132 million in debt. The company has been praised for its capital efficiency, having spent “just a couple of dozen millions” of euros to build competitive AI models.

Jeannette zu Fürstenberg, who leads General Catalyst’s European business, remarked, “The capital efficiency of the company is really outstanding,” adding that Mistral had spent “the smallest possible fraction” of what its rivals had to build competitive AI models.

The startup plans to use the new capital to scale up its commercial efforts and invest in more computing resources. “It remains a capital-intensive market,” Mensch noted. “The more [computing] capacity we have, the more people we can get into our team to break the barriers of artificial intelligence.” 

Mistral AI currently employs about 60 staff, with the majority based in France and is focused on product development and research.

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