Mistral AI, a French AI startup, has taken the AI world by storm, raising a powerful €600 million ($640 million) in its second round of funding, giving it a $6 billion valuation.
The round was led by General Catalyst, with participation from existing investors comparable to Andreessen Horowitz, Lightspeed, Bpifrance and BNP Paribasin addition to well-known corporate sponsors, including Nvidia, Samsung Venture Investment Corp. and Salesforce Ventures.
Founded in April 2023 by former Google and Facebook employees Timothée Lacroix, Guillaume Lample and Arthur Mensch, Mistral AI has quickly develop into a serious player in the worldwide AI race.
CEO Arthur Mensch believes that this round of funding is a transparent signal of the corporate's ability to disrupt the AI market. He explains: “We have shown that this just isn’t the case and we now have effectively turned OpenAI's business model on its head.”
The The company’s meteoric rise began with a $113 million seed round in June 2023 that valued the startup at $240 million before launch. Just one 12 months later, the corporate is value a remarkable 25 times more.
Since its inception, Mistral AI has focused on developing powerful open source language models and efficient training methods.
The startup's success has not gone unnoticed by industry leaders, who at the moment are in search of alliances. In February 2024, the corporate entered right into a distribution partnership with Microsoft that offers it access to Azure's supercomputing cloud architecture for training and deploying its AI models.
Microsoft also invested 15 million euros (16.3 million US dollars) within the startup, which will likely be converted into equity as a part of the most recent financing round.
The rise of Mistral AI
Mistral AI entered the scene in May 2023 with a $120 million funding round and was valued at $250 million before launch.
The startup promised to take a unique path in AI development based on transparency, academic collaboration and public code sharing, slightly than the closed-source approach of its Silicon Valley counterparts.
Many industry experts initially estimated Mistral AI's probabilities to be slim given the billion-dollar research budgets of US technology giants backed by corporations comparable to Amazon, Google and Microsoft.
However, a flood of demos showcasing the Paris-based company's rapid innovations led to a change in perception.
Mistral AI, which operated largely under the radar in 2022, unveiled groundbreaking text generation software in December 2023 that rivaled leading systems from Meta and OpenAI.
Mistral AI's impressive AI models
One of the most recent models from Mistral AI, mistral Largeis a proprietary model that lags only about 10% behind OpenAI's GPT-4 within the reasoning benchmarks.
While it just isn’t open source, Mistral has continued to release open source models since then in order to not undermine its founding principles.
These include Mistral 7B, Mixtral 8x7B, Mixtral 8x22Band Codestral, a 22 billion parameter LLM that may understand greater than 80 programming languages.
Mistral will come under pressure from the EU’s upcoming AI law.
French President Macron pointed to fast-growing Paris-based startup Mistral AI for instance of “French genius” in AI innovation and expressed concern that regulations could hamper such emerging players.
Some also fear that the AI law will disproportionately affect open source AI research efforts.
While the law goals to guard open-source research and support EU AI corporations with funding and computing power, it’s difficult to predict how those weighing up closed-source and open-source AI will fare within the face of stricter regulations.
At the moment, nevertheless, Mistral definitely has the wind at his back.
