Mistral AI, the French artificial intelligence startup, is closing in on a €450 million ($487 million) funding deal, reaching a $2 billion valuation less than a year after its inception.
Andreessen Horowitz is part of a group of investors set to provide €325 million in new funding, with the Silicon Valley investor leading with a €200 million commitment. As part of the round, Nvidia and Salesforce are contributing an additional €120 million in convertible debt.
The Paris-based firm, known for its open-source models powering chatbots and other generative AI tools, has experienced rapid growth since its launch earlier this year. With former scientists from Google's DeepMind and Meta at its helm, Mistral AI has quickly established itself as a serious challenger to early leaders like OpenAI and Anthropic.
Mistral AI kicked off with a groundbreaking $113 million of seed funding in June — the largest-ever seed investment for a European tech startup that also came within just a month of the company's founding. The Lightspeed Venture Partners-led round also came mere months before this week's news.
The startup's primary product roll-out to date is the release of generative AI model Mistral 7B, available to developers free of charge. According to CEO Arthur Mensch, Mistral's training methods are more efficient, allowing the company to offer products at a fraction of the cost of larger proprietary solutions.
Mistral is also developing its products with Europe in mind, following the European Union's AI Act and prioritizing data security. That effort, the company hopes, should help it in its bid to secure a foothold with European corporate customers ahead of rivals like OpenAI.
The business is not yet generating revenue, though plans to offer its models to developers via an API for a fee, similar to the model employed by OpenAI.
As part of the latest funding round, the startup's co-founders took the opportunity to sell down part of their stakes (reported as an amount greater than €1 million), alongside additional secondary sales from other early investors.