Mistral AI has been gaining attention lately, but the French AI company is often misunderstood. It develops large language models, but its approach is different from what many people expect.
Unlike OpenAI, Mistral’s focus is not solely on creating a popular chatbot. Its chat and agent Vibe, formerly Le Chat, has limited brand recognition compared to ChatGPT. Instead, Mistral is following a strategy similar to Palantir, with forward-deployed engineers helping governments and large corporations adopt AI and tailor it to their use cases.
Mistral’s means are better suited for this approach, as the company is rumored to be raising $3.5 billion at a $23.15 billion valuation. While this is less than U.S. frontier labs, Mistral’s revenues have ramped up, with annual recurring revenue above $400 million, up from $20 million just one year earlier.
Mistral CEO Arthur Mensch has become a public ambassador for a certain vision of AI, but he still has some evangelizing to do when it comes to explaining his own company. In a LinkedIn post, Mensch broke down what Mistral has been doing, including deploying its models and agent platform on the infrastructure of its Enterprise customers, which involves using excess AI compute to drive growth.
The company’s vision is to make sure everyone gets access to the best AI systems, outside of centralized control exercised by states or corporations. They are looking beyond the enterprise and aim to keep making big investments into research to keep up with foundational AI rivals.
Mensch claimed that Mistral does not yet own the best language models, but it has constantly reduced that gap. The company has a very exciting model to come this summer, which will be open-weight, and it’s opening early access to it in July.
Mistral’s upcoming model has already generated buzz, and the company has been engaging with jokes and memes on X. The world, especially other countries, is keeping an eye out for whatever Mistral has in its bag.
Behind the scenes, Mistral acquired infrastructure startup Koyeb to further boost its plans to build “a true AI cloud.” The company also announced a €4 billion investment strategy to build data centers in France and Sweden, with sovereignty concerns never far away.
Mistral’s three founders share a background in AI research at major U.S. tech companies that have operations in Paris.
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In terms of partnerships, Mistral has secured strategic partnerships with the likes of Accenture, press agency Agence France-Presse, France’s army and job agency, Luxembourg, shipping giant CMA, German defense tech startup Helsing, IBM, Orange, and Stellantis. These partnerships are expected to drive growth and increase adoption of Mistral’s AI models.
It has also participated in the creation of an AI Campus in the Paris region, as part of a joint venture with UAE investment firm MGX, NVIDIA, and France’s state-owned investment bank Bpifrance. The company launched AI for Citizens, an initiative that aims to help states and public institutions strategically harness AI for their people, similar to the goals of recent international talks.
The company has raised around $4 billion in funding to date, with most of it being debt financing. Mistral has also raised several venture funding rounds, including a record $113 million seed round led by Lightspeed Venture Partners in June 2023.
The funding rounds have been led by notable investors, including Andreessen Horowitz, General Catalyst, and ASML. Mistral’s valuation has increased significantly, with the latest valuation being around $13.8 billion.
Mistral has acquired infrastructure startup Koyeb and Austrian startup Emmi, which focuses on physics AI. They are also testing a few things with Nvidia, but Mensch isn’t ruling out designing its own chips in the future.
Mistral is not for sale, according to Mensch. The company is planning for an IPO, given the amount of funding it has raised so far.
A sale to a rumored prospective buyer like Apple may not provide high enough multiples for its investors, not to mention sovereignty concerns depending on the acquirer.
Mistral’s story is still unfolding.
The company is likely to play a significant role in shaping the future of AI, especially in Europe, as it continues to evolve and grow.
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