Mistral AI Raises $415 Million in Funding, Repositioning EU in AI Development Race

Published: December 11, 2023 at 8:25 am Updated: December 11, 2023 at 8:25 am

Edited and fact-checked:
December 11, 2023 at 8:25 am

In Brief

Mistral AI raised $415 million in its second funding round to advance AI capacities and build products for developers and enterprises.

Mistral AI Raises $415 Million in Funding, Repositioning EU in AI Arena

French artificial intelligence (AI) company Mistral AI raised $415 million in its second funding round, led by Andreessen Horowitz and LightSpeed Ventures. The company aims to develop advanced AI capabilities in the coming months and build products for developers and enterprises.

Founded seven months ago by former researchers from Meta and Google AI — Mistral specializes in developing technology that businesses can utilize to deploy chatbots, search engines, online tutors and various other AI-driven products.

The company advocates for sharing AI as open-source software—computer code that is freely copyable, modifiable and reusable—providing external entities with all the necessary resources to quickly build their own chatbots.

Mistral earlier introduced Mixtral 8x7B, an open model aiming to become the European Union’s alternative to AI platforms such as OpenAI’s ChatGPT and Google’s Bard. The Mistral AI platform is currently available in beta access and is scheduled to be operational by early 2024.

Backed by Salesforce, BNP Paribas, General Catalyst, La Famiglia, Eric Schmidt, New Wave, Motier Ventures and Sofina the startup increased its value more than sevenfold in six months. In summer 2023, the company raised a seed funding round of about $113 million, valuing the company at around $260 million.

With the support from the French government, Mistral has been actively lobbying for changes to the European Union AI Act which is currently in the process of becoming a law.

Open-Source AI Grasps Industry Attention

Open-source AI ventures embrace transparency and collaboration, enabling researchers, developers, and enthusiasts to collectively contribute to AI systems. By openly sharing algorithms, datasets and codebases, it democratizes AI development, accelerating progress within a community-driven ecosystem that expands the boundaries of AI capabilities.

Tech conglomerate Meta, also a former home of two Mistral founders, has been a leading proponent of companies endorsing an open-source approach. This year, the company developed a large language model LLaMA, and released it as open-source software.

Last week, Mistral also released its latest technology as open-source software, stating that it performs at a level on par with Meta’s technology.

Investors are also maintaining interest in startups that embrace the open-source approach.

Perplexity, founded last year by another group of strong researchers, recently raised $70 million in a new funding round, valuing the company at $500 million. Its investors include IVP and Bessemer Venture Partners.

With the new investment, Mistral progresses toward its goal of achieving frontier-level AI capacities. Committed to open-source principles, the company aims to democratize AI development, provide the tecchnology to businesses. As part of a growing trend, Mistral’s recent success resonates with sustained investor interest in rapidly evolving AI technology.

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson