Mistral Secures $640M Investment to Compete with OpenAI and Anthropic in the Global Generative AI Race

A year after making headlines with Europe's largest seed round of $113 million, Mistral AI is back in the spotlight, raising an impressive $640 million in Series B funding—nearly six times its previous investment.

The Paris-based startup's latest round combines debt and equity, catapulting its valuation to nearly $6 billion. General Catalyst led the investment, with participation from both new and existing investors, including Lightspeed, Andreessen Horowitz, Bpifrance, and the investment divisions of IBM, Samsung, Salesforce, Cisco, and Nvidia. This funding reflects a staggering 23-fold increase in Mistral's valuation, up from $240 million in June 2023.

"I’m thrilled to see our investors reaffirm their commitment to Mistral, enabling us to advance our mission in AI technology. This round ensures our continued independence and keeps our vision under the founders' control," said Arthur Mensch, co-founder and CEO of Mistral.

The company plans to utilize this funding to enhance its compute capacity and expand its team. This growth will boost Mistral's international commercialization efforts, positioning it to compete more effectively against global rivals like OpenAI and Anthropic—recently recognized for partnering with Apple as the first third-party LLM provider for iOS 18.

Mistral’s Ascendancy as an Open AI Leader

Since its inception, Mistral has gained a reputation for its commitment to open-source models, employing innovative methods such as sharing torrent links for easy access and testing. The company launched the Mistral 7B and Mixtral 8x7B models, followed by Mixtral 8x22B and Codestral, a 22B parameter generative AI model designed for coding tasks.

Additionally, Mistral introduced Mistral Large, a proprietary model that closely rivals GPT-4, outperforming Claude 2, Gemini Pro, and GPT-3.5 with proficiency in five languages and a context window of 32K tokens. While Mistral Large is primarily accessible through the company’s API and Microsoft Azure, it can be tested in the newly released chat application.

Mistral reports over 27 million downloads from public repositories, with its open models actively used in various sectors, particularly finance, technology, and public service. The performance of these open models has garnered attention across Europe and beyond, prompting Mistral to enhance its commercialization strategies through significant partnerships. In the last six months, collaborations with tech giants and startups, including Microsoft, Snowflake, Databricks, Capgemini, IBM, and Perplexity, have solidified Mistral’s reputation in the competitive AI landscape dominated by OpenAI, Anthropic, and Google.

With the latest funding—$500 million in equity and $140 million in debt—Mistral is well-positioned to accelerate its efforts and expand distribution channels, increasing usage of its models across diverse markets, including the United States.

According to Bloomberg Intelligence, the generative AI market, valued at $40 billion in 2022, is expected to surge to $1.3 trillion over the next decade, with a compound annual growth rate (CAGR) of 42%.