Paris-based startup Mistral AI, a rising star in the artificial intelligence (AI) domain, has successfully closed its much-anticipated Series A funding round, raising €385 million ($415 million).
The latest funding round catapults Mistral AI’s valuation to about $2 billion, according to Bloomberg. This positions the French unicorn as a significant player on the global AI stage, challenging industry giants like OpenAI and Google.
Led by prominent Silicon Valley venture firm Andreessen Horowitz, and Lightspeed Ventures, the funding round also saw participation from tech giants Nvidia and Salesforce, French bank BNP Paribas, and US venture capital firm General Catalyst. The diverse group of investors reflects the widespread belief in Mistral AI’s potential.
Venture capital giant Andreessen Horowitz (a16z) said they were thrilled to announce Series A investment in Mistral — a small 22-person but passionate developer community growing up around open-source AI. “These developers generally don’t train new models from scratch, but they can do just about everything else: run, test, benchmark, fine tune, quantize, optimize, red team, and otherwise improve the top open-source LLMs.”
Mistral’s rapid ascent in the AI landscape
Mistral AI’s journey to unicorn status has been meteoric. Founded just seven months ago by former researchers from Meta and Google, Mistral AI, raised €105 million (about $113 million) in a seed funding round, valuing it at approximately $260 million. The current Series A funding round has propelled Mistral AI’s value more than sevenfold in six months.
In the last seven months since the company was founded:
- Mistral has released the 7B model, the most powerful language model for its size to date, outperforming models twice its size.
- Released Mixtral 8x7B, a high-quality sparse mixture of experts model (SMoE) which outperforms Llama 2 70B as well as GPT3.5, on most benchmarks. Mixtral 8x7B can handle French, German, Spanish, Italian, and English.
Much like industry giants Microsoft-backed OpenAI and Google’s Bard, Mistral is working on generative AI, utilizing large language models (LLMs) capable of crafting humanlike prose and code within seconds. However, what sets the European startup apart is Mistral’s commitment to sharing this transformative technology as open-source software. This allows the developers to freely copy, modify, and reuse the source code, empowering them to construct their own AI-driven products, such as chatbots.
While counterparts like OpenAI and Google express reservations about the potential risks associated with an open-source approach, citing concerns about misinformation and harm, Mistral stands firm in its commitment to embrace an open-source philosophy.
Who are the co-founders?
The European startup, specializing in generative artificial intelligence, was co-founded in early 2023 by Timothée Lacroix, Guillaume Lample and Arthur Mensch. The three co-founders, with backgrounds from top French institutions like ENS and Polytechnique, have quickly positioned Mistral AI as a key player in generative AI.
Timothée Lacroix and Guillaume Lample, former researchers in the Paris-based AI lab of Meta (parent company of Facebook and Instagram), joined forces with Arthur Mensch. Mensch, a researcher at DeepMind, an AI lab acquired by Google in 2014 for $650 million, completed the trio of founders for Mistral AI. “The trio are part of a new breed of founders who combine deep technical expertise and operating experience working in the largest labs,” according to Lightspeed Venture.
The three are committed to building AI models that could rival technology under development at OpenAI, the San Francisco start-up that kicked off the AI boom last fall with the release of the ChatGPT chatbot.
Mistral believes in open-source AI models
Specializing in generative AI, Mistral AI develops models for businesses to deploy chatbots, search engines, online tutors, and other AI-driven products.
What sets Mistral AI apart is its commitment to an open-source approach, allowing developers and companies to freely build upon its technology and contribute to its advancement as opposed to closed proprietary models like OpenAI’s ChatGPT and Anthropic’s Claude.
The French startup is on a mission to bring open-source AI models to the world and stands out for its technological prowess and commitment to ethical and responsible AI development. “Their goal was to create a European, open source project with the ambition of becoming a major global player in Generative AI,” Lightspeed Venture Partners said in June.
Mistral AI’s recent funding success underscores the growing interest and investments in building open-source large language models. Investors backing open-source models claim that these will be more customizable, bring down costs, and level the playing field.
“We think this is the most promising path to achieve robust, widely adopted, and trusted AI systems, and that Mistral is the leading independent team on this path,” according to the venture firm Andreessen Horowitz. A16z is one of the most active investors in generative AI, according to PitchBook data.
“Open source AI should be allowed to freely proliferate and compete with both big AI companies and startups. There should be no regulatory barriers to open source whatsoever,” Andreessen Horowitz co-founder Marc Andreessen wrote in June.
As U.S. and Chinese tech giants dominate the AI race, Mistral emerges as Europe’s leading player in generative AI. Securing €385 million in funding, Mistral is set to enhance its language models, solidifying its frontrunner status in the rapidly evolving filed of generative AI.
