This 4-Week-Old Startup Just Raised $113M to Challenge OpenAI

Mistral AI, a Paris-based startup founded by former Google’s DeepMind and Meta employees, has secured $113 million in seed funding within just four weeks of its establishment. This funding round, led by Lightspeed Venture Partners, attracted a diverse range of investors from France, Germany, Italy, Belgium, and the UK.

The newly-minted AI firm aims to compete against OpenAI in the realm of building, training, and applying large language models and generative AI. Unlike its competitors, Mistral AI embraces an open-source approach and targets enterprises, addressing what CEO Arthur Mensch identifies as the biggest challenge in the field: “to make AI useful.”

The company plans to release its first text-based generative AI models in 2024.

With shareholders like French investment bank Bpifrance, French billionaires Rodolphe Saadé and Xavier Niel, and former Google CEO Eric Schmidt, Mistral AI has gained significant support in its early stages. Valued at $260 million, the company has generated considerable buzz since rumors about its funding started circulating in the French press.

Mistral AI’s funding round stands as one of the largest seed investments ever secured by a European company specializing in generative AI. In comparison, Stability AI’s high-profile launch last year raised $101 million.

Mensch, along with his co-founders Timothée Lacroix and Guillaume Lample, all in their early thirties, share a long history together, having studied artificial intelligence during their school days. The trio recognized the rapid acceleration of AI technology, particularly inspired by OpenAI’s GPT model, which sparked their motivation to pursue a different path.

(L-R) Guillaume Lample, Arthur Mensch, and Timothee Lacroix: founders of Mistral AI
© David Atlan

Dissatisfied with the proprietary nature of existing approaches, Mistral AI plans to use only publicly available data to build models, avoiding potential legal hurdles faced by others in training data acquisition. The company will encourage users to contribute their own datasets, following an open-source model for both models and data sets.

Despite concerns about security, Mistral AI firmly believes that the benefits of open source outweigh the risks, including in the realm of application security.

Despite its young age and lack of customers or products, Mistral AI’s rapid funding success reflects the continued interest in AI startups. While tech giants like Google, Apple, Meta, Amazon, and Microsoft are expected to make their mark in the AI space, the emergence of startups and their ability to attract investors signals that the game is far from over.

The name “Mistral” derives from a wind that brings good weather to Europe, symbolizing the startup’s ambition to bring a positive change to the AI landscape.

Information for this briefing was found via TechCrunch, Bloomberg, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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