Mistral AI, a Paris-based artificial intelligence startup, has secured €600mn in new funding, propelling its valuation to nearly €6bn. This significant investment comes just a year after the company’s launch, positioning Mistral AI as a strong contender against OpenAI, with backing from tech giants like Microsoft and Nvidia.
The funding round, tripling the company’s valuation since December, is led by General Catalyst. Existing investors, including Lightspeed, Andreessen Horowitz, Bpifrance, and BNP Paribas, also participated. Corporate backers include Nvidia, Salesforce, Samsung, and IBM. Yuri Milner’s DST Global joined as a new investor in Mistral’s latest round.
Arthur Mensch, Mistral’s CEO, told the Financial Times, “We were told when we started that this is a market that is never going to be disrupted. We showed that this wasn’t the case and we effectively disrupted the OpenAI business model.”
Microsoft, which invested €15mn in February, did not participate in the new round. The latest deal is the largest yet for a startup building general-purpose AI models outside Silicon Valley. Mistral AI aims to expand from a European champion to a global contender, having raised over €1bn.
Investors are investing heavily in AI startups that are building large language models capable of producing high-quality text and imagery. Meanwhile, Big Tech companies like Microsoft, Google, Meta, and Amazon are investing billions in computing infrastructure to build their own systems.
Mistral’s latest funding comprises €468mn in equity and €132mn in debt, valuing the company at €5.8bn. The company’s co-founders, Timothée Lacroix, Guillaume Lample, and Mensch, remain majority shareholders.
Mensch stated that Mistral AI has used a fraction of the resources compared to its competitors, spending just a couple of dozen millions of euros to build products rivaling those of tech giants like OpenAI, Google, and Meta.
Mistral’s latest funding round follows Elon Musk’s $6bn investment in his startup xAI, as competitors challenge OpenAI’s head start, backed by $13bn from Microsoft.
Jeannette zu Fürstenberg, leading General Catalyst’s European business, praised Mistral’s capital efficiency. Mensch said Mistral raised more capital to scale up commercialization efforts and acquire more computing resources.
Mistral AI employs around 60 people, with about three-quarters focused on product development and research. The startup’s technology stands out as many of its AI systems are open-source, making it more appealing to large corporate clients.
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