French startup Mistral AI raises $650M to rival OpenAI

French tech startup, Mistral AI, said on Tuesday it has raised 600 million euros (~$650 million) in a funding round led by venture capital firm General Catalyst. The round values the OpenAI competitor at about 5.8 billion euros, or $6.3 billion, according to several media reports.

Also read: Mistral emerges as European contender in global AI race

Reports say new and existing investors, including Andreessen Horowitz, Lightspeed, Samsung, Salesforce, and Nvidia, also participated, bringing the company’s total funding to over $760 million. The funding comes as investors continue to show a strong appetite for AI technologies.

Mistral wants to bring AI into ‘everyone’s hands’

Writing on the X platform, Arthur Mensch, the co-founder and CEO of Mistral AI, expressed gratitude to the startup’s new and existing investors “for their continued confidence and support for our global expansion.”

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

Mistral AI was founded by former Google and Meta developers in May 2023. Weeks later, the company, which is aiming to become a “European leader in productivity and creativity enhancing artificial intelligence,” raised $113 million in a seed round.

AI rivalry heats up

In February, the firm released a new large language model (LLM) called “Mistral Large,” which directly competes with OpenAI’s GPT-4 and Claude 2 from Anthropic. The company said at the time the model “reaches top-tier reasoning capabilities” and is fluent in English, French, Spanish, German, and Italian “with a nuanced understanding of grammar and cultural context.”

Alongside the LLM, the technology behind generative AI tools, the Paris-based company also unveiled a conversational AI chatbot called “Le Chat,” or “the cat,” its alternative to ChatGPT. Building such models is expensive, requiring processors that may cost up to $100,000 each.

Also read: French AI startup faces backlash as new LLM generates harmful content

Mistral has already made its large language model available to Microsoft customers through the cloud computing service Azure. Microsoft, which already hosts AI models from OpenAI on its cloud platform, took an undisclosed stake in Mistral, according to the Financial Times.

Cryptopolitan Reporting by Jeffrey Gogo