Microsoft-Backed Mistral AI Sees Valuation Spike To $6B After Securing $645M Funding

Mistral AI, a French tech startup backed by Microsoft, has raised $645 million in a funding round, bringing its valuation to $6 billion.

What Happened: The funding round was led by venture capital firm General Catalyst and included contributions from existing investors, CNBC reported on Wednesday. Mistral AI, which is just over a year old, is aiming to compete with OpenAI and establish itself as a leading AI company in Europe.

The startup focuses on developing large language models (LLMs) that power applications like chatbots, similar to ChatGPT. These projects require significant investment in infrastructure, including purchasing semiconductors from Nvidia.

Last year, Mistral AI raised 105 million euros ($113 million) in its seed round. Co-founder and CEO Arthur Mensch expressed gratitude to the company’s investors on social platform X, stating that the new funding will accelerate their roadmap for global expansion.

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Why It Matters: Mistral AI has been making significant strides in the AI industry since its inception in early 2023. The company, based in Paris, has been targeting the U.S. market, aiming to provide alternatives to AI models from industry giants like OpenAI and Google. In May, Mistral AI hired Marjorie Janiewicz, former chief revenue officer of Foursquare, as its first U.S. general manager to spearhead its American expansion. Janiewicz mentioned that the startup is “gaining momentum” in the U.S. and plans to grow its team.

Additionally, Mensch has been vocal about his views on artificial general intelligence (AGI). In an April 2024 interview with The New York Times, Mensch criticized the obsession with AGI, calling it an attempt at “creating God.” He expressed his discomfort with the “religious fascination” surrounding AGI.

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Image: Shutterstock/ Inside Creative House

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari