Seven months of existence and already a second fundraising which amounts to several hundred million euros. Mistral AI, the French artificial intelligence start-up created in May by industry leaders, announced on Sunday that it had raised 385 million euros, thus becoming one of the two AI champions in Europe. After the 105 million already raised in June, this second round of financing values the company at around 2 billion dollars, according to financial sources, which propels it among the French unicorns, these tech companies valued at more than a billion euros.
The emergence of European AI players comes as the EU just agreed on Friday on future regulation of the sector, without restricting European innovation. France and Germany feared that excessive regulation would nip their emerging champions in the bud.
“Creating a European champion with a global vocation in artificial intelligence”
“Since the creation of Mistral AI in May, we have followed a clear ambition: to create a European champion with a global vocation in artificial intelligence […], declared its boss, Arthur Mensch, quoted in the group’s press release. In Europe, only the German Aleph Alpha is so richly endowed, having raised nearly 500 million euros in early November. In Germany, the fundraising to support the national gem was led by German industrialists (Bosch, Lidl, Burda) and accompanied by foreigners. Robert Habeck, German Minister of the Economy, declared that this was an important step to “ensure our sovereignty in the artificial intelligence sector”.
Among the backers of Mistral AI are the American software publisher Salesforce, the bank BNP Paribas, the transporter CMA CGM, indicates the start-up in its press release. According to industry sources, the Nvidia group, a global specialist in supercomputer chips, is also involved. “We maintain control of the board,” explains to Les Echos Arthur Mensch, co-founder of Mistral AI, who also remains in the majority with his partners during his second fundraising.
During the first round of Mistral AI, it was the American Lightspeed Venture which captured the majority of the capital (10%). This time, it is Andreessen Horowitz, the star Californian venture capital fund of Silicon Valley, which is leading the fundraising. According to Bloomberg, the fund alone would have injected around 200 million euros, followed by Lightspeed. Mobilizing the biggest players in Silicon Valley demonstrates the enthusiasm generated by Mistral AI in less than a year of existence. The American press already cites it as a potential rival to Open AI, the origin of ChatGPT.
An open source language
Like many of its competitors, Mistral AI, which now has 22 employees, most of them engineers with expertise in artificial intelligence, offers companies “open source” language models powered by public data. Unlike OpenAI, the artificial intelligence models developed by Mistral AI can therefore be improved by any developer in the world. Its main asset is to have been co-founded by three French AI experts, trained at X or ENS, hired by the American giants but returned to Paris.
The CEO, Arthur Mensch, 31, a polytechnician and normalien, spent almost three years at DeepMind, Google’s AI laboratory. His associates come from Meta (Facebook): Guillaume Lample is one of the creators of the LLaMA language model unveiled by Meta in February, and Timothée Lacroix was also a researcher at Meta.
Strong political support
Since its creation, Mistral AI has conquered French political and economic circles. In June, Arthur Mensch was alone with Emmanuel Macron on the stage of Vivatech, the major European tech show. From its first round of financing, led by the American fund Lightspeed Venture, several big bosses looked into its cradle: Xavier Niel, the owner of Free, Rodolphe Saadé, the boss of CMA CGM, as well as the former CEO of Google Eric Schmidt. The government is visibly attentive to this new player, of which the former Secretary of State for Digital Cédric O is a “co-founding advisor” as well as a member of the Interministerial Committee on Generative AI created in September by Elisabeth Borne.
Europe has so far been largely overtaken by the United States in the race for AI. Open AI and its flagship product ChatGPT, funded by Microsoft, has raised several billion dollars. Its rivals are none other than Google, which has just released its Gemini model, as well as Amazon and Meta. Mistral AI’s fundraising is all the more notable as funding plummeted in 2023. This is the second record of the year in France, after the 850 million euros from the electric battery manufacturer Verkor in September .