Mistral AI from France enters the scene with an impressive initial funding of $113 million, valued at $260 million, as it aims to compete with OpenAI

Mistral AI from France enters the scene with an aims to compete with OpenAI

AI is gaining momentum at a rapid pace, as evidenced by the recent success of a startup that secured an impressive $113 million in seed funding. Despite being only four weeks old, Mistral AI, based in Paris, aims to compete with OpenAI in the development, training, and application of large language models and generative AI. Led by co-founders who have backgrounds at Google’s DeepMind and Meta, Mistral AI plans to focus on open source solutions and cater to enterprise clients, addressing the current challenge of making AI truly useful. The company intends to release its first text-based generative AI models in 2024.

The seed funding round is being led by Lightspeed Venture Partners, with participation from prominent investors such as Xavier Niel, JCDecaux Holding, Rodolphe Saadé, and Motier Ventures in France, as well as La Famiglia and Headline in Germany, Exor Ventures in Italy, and Sofina in Belgium. Notably, Mistral AI counts Bpifrance and former Google CEO Eric Schmidt among its shareholders. The funding, amounting to €105 million (equivalent to $113 million), has valued Mistral AI at €240 million ($260 million). This figure aligns with previous rumors circulating in the French press about the company’s valuation.

The three co-founders, Arthur Mensch, Timothée Lacroix, and Guillaume Lample, are all in their early thirties and have known each other since their school days, where they studied various aspects of artificial intelligence. Mensch, previously employed at DeepMind in Paris, and Lacroix and Lample, who worked at Meta’s Paris AI outpost, recognized the accelerated growth of AI technology in the past year, particularly inspired by OpenAI’s advancements with the GPT model. However, they saw a lack of openness in the field and seized the opportunity to differentiate themselves by prioritizing open source solutions, considering it an integral part of their company’s DNA.

While Mistral AI’s specific activities and products are still in their early stages, Mensch outlined the company’s approach. They plan to build models using publicly available data to avoid legal challenges associated with training data, and they will allow users to contribute their datasets as well. Both the models and datasets will be open-sourced. Although open source has raised concerns in areas like application security, Mistral AI believes that the benefits outweigh the potential for misuse. They see open source as beneficial in terms of security and aim to leverage it in their approach.

Mistral AI’s unique focus lies in catering to enterprise customers rather than consumers. They aim to assist these customers in understanding their AI needs and provide user-friendly tools for creating their own AI-based products. While investing in such a young company without any customers or products may seem risky, Antoine Moyroud, the lead investor from Lightspeed, believes it is a worthwhile leap. He compares the AI landscape to infrastructure domains like cloud computing and databases, where a handful of players dominate. Moyroud sees Mistral AI’s talented team, with their expertise in language models and optimization, as a strong contender in this space.

The fact that AI startups like Mistral AI are securing significant funding indicates that there is still room for innovation and competition, despite the presence of tech giants like Google, Apple, Meta, Amazon, and Microsoft in the AI space. Mistral AI aims to assemble a world-class team and develop the best open source models with the newly acquired funding. By taking this leap, Mistral AI hopes to contribute to the global effort of shaping AI development while giving France a chance to establish itself in the field. Just like the mistral wind that brings good weather, Mistral AI anticipates a positive impact with its endeavors.