AI startup Mistral has closed a massive 600 million euro (about $644 million) funding round, the Paris-based firm announced on Tuesday. The fundraising is said to be based on a company valuation of $6 billion.
“Mistral AI has grown nearly 3x in valuation since December and has grown nearly 25x over the past 12 months,” Mistral AI researcher Devendra Chaplot said on LinkedIn.
The Series B fundraising round was led by General Catalyst and included participation from notable investors such as Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, Samsung Venture Investment Corporation, Salesforce Ventures, Cisco and IBM.
“Thank you to our new and existing investors for their continued trust and support for our global expansion,” Mistral AI CEO and Founder Arthur Mensch tweeted. “This accelerates our roadmap as we continue to get frontier AI into everyone's hands.
The cash pick could make Mistral the world's most valuable open source AI company and the fourth largest AI company overall behind only OpenAI, Anthropic and Databrick. The company was founded in April 2023 by a team that included former Meta employees and Google's DeepMind AI project.
In announcing the fundraising, Mensch emphasized the capital-intensive nature of the industry, citing the need for increased computing power and talent acquisition to “break the barriers of artificial intelligence.” The capital will accelerate the company's roadmap to increase computing capacity, hiring efforts and global expansion plans, particularly in the United States, he said.
Mistral AI focuses on introducing its proprietary models through API-based products designed for enterprise customers with specific business needs, primarily around privacy or personalization. Similarly, the company has developed and released open source models such as Mistral 7B, Mixtral 8x7B and Mixtral 8x22B under the Apache 2.0 license, making it accessible to developers and researchers.
This open source focus is a key factor in the success of Mistral AI. By comparison, Calm AI—the world's leading open-source image generator with no competition in the space, developed by Stable Diffusion—costs more than $1 billion.
Both companies are still encumbered by top AI firm OpenAI, which tripled its value in a February deal worth $80 billion.
On a technical level, the most efficient models from Mistral can deliver large offerings on different parameters, including open source models such as GPT-3.5 Turbo from OpenAI, Claude 2 from Anthropic or Gemini Pro from Google on the LMSys Chatbot Arena leaderboard.
Although Mistral AI offers a free chatbot, its revenue streams include enterprise plans, ownership models through token licensing, and an upcoming API that supports fine-tuning for customers through usage fees or subscriptions. The company plans to commercialize the models through a multi-year partnership with Microsoft's Azure platform, including a $16.3 million investment and equity participation.
The AI boom revitalized the open source industry with significant contributions from major tech companies. Meta leads the charge with 1909 open source models released to date. Google has more than 800 contributions, Microsoft shared 300 models and Apple 47 contributions.
Beyond the open source community, significant investments are being made in AI developments in various fields. Several AI startups, including Inflection.ai, Modal.com, Character.ai, and Perplexity.ai, have recently received significant funding to advance generative AI applications.
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