French Startup Mistral AI Aims to Rival AI Giants with $640 Million Raise

Paris-based artificial intelligence startup Mistral AI has raised €600 million (approximately $640 million) in funding, bringing its valuation to $6 billion.

This new funding round marks the largest for a startup developing large-scale general-purpose AI models outside of Silicon Valley. It also provides the French startup with additional resources to compete with Silicon Valley’s leading AI companies.

Mistral AI Triples Valuation with New $640 Million Raise

A recent report reveals Mistral’s latest funding consists of €468 million ($502 million) in equity and €132 million ($141 million) in debt. Existing backers General Catalyst and Lightspeed Venture Partners are among the biggest investors in Mistral’s new Series B funding round. Arthur Mensch, the co-founder and CEO of Mistral AI, expressed his gratitude for this funding round.

“We are grateful to our 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 wrote.

Read more: AI in Finance: Top 8 Artificial Intelligence Use Cases for 2024

Devendra Chaplot, a researcher at Mistral AI, also echoes Mensch’s enthusiasm for this funding.

“With a $640 million raise at a $6 billion+ valuation, Mistral AI has grown ~3x in valuation since December and ~25x in the last 12 months!” Chaplot stated.

Meta and Google’s DeepMind alumni co-founded Mistral AI in April 2023. The company aims to create foundational models rivaling today’s best-performing models. These include OpenAI’s GPT-4, Anthropic’s Claude 3, and Meta’s Llama 3.

Mistral AI has released several models, such as Mistral 7B, Mistral 8x7B, and Mistral 8x22B. The company offers these under an open-source Apache 2.0 license. This license allows unrestricted use and reproduction, provided there’s proper attribution.

The company’s most advanced offerings, like Mistral Large, are proprietary. They are intended to be repackaged as API-first products. Companies can use Mistral Large through an API that they’ll have to pay for according to their usage.

The company also offers a free chat assistant called Le Chat. Meanwhile, Codestral, its first generative AI model for coding, has a restrictive license.

In June 2023, Mistral AI secured €105 million ($113 million) from a founding round led by Lightspeed Venture Partners. This achievement is particularly noteworthy, considering the funding was secured shortly after the company’s launch. Jean-Nöel Barrot, the former minister in charge of digital transition and telecommunications in France, acknowledged Mistral AI’s achievement.

“Congratulations to the startup Mistral AI which raises €105 million only one month after its creation: a record!” Barrot said.

Investors Bullish on AI Growth Despite Recognized Risks

Investors’ confidence in generative AI startups like Mistral AI is plausible. A recent survey from McKinsey shows that 67% of the respondents expect their organizations to invest more in AI over the next three years.

Despite the potential, the survey noted that while businesses begin to see the benefits of generative AI, they also recognize the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability.

Read more: How Will Artificial Intelligence (AI) Transform Crypto?

The Risks of Generative AI. Source: McKinsey

However, KPMG experts believe blockchain technology could solve companies’ challenges in safeguarding their IP and avoiding infringement. Blockchain technology could offer a secure and immutable way to track and manage IP, ensuring attribution and potential royalties for reused content and reducing the risk of IP misappropriation.

For instance, a company could store its IP as non-fungible tokens (NFTs) with embedded smart contracts on a blockchain, specifying the terms of use for generative AI. This approach could help prevent unauthorized use of proprietary data and ensure proper credit or compensation. Ultimately, it can help companies leverage artificial intelligence’s benefits while mitigating risks associated with IP protection and legal challenges.

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