Paris-Based Mistral AI Secures $640M Funding to Advance AI Innovations

Mistral AI has successfully concluded its highly anticipated Series B funding round, securing €600 million (approximately $640 million based on current exchange rates) through a combination of equity and debt financing, with General Catalyst leading the investment. Following this round, the company has reached a valuation of $6 billion.

As a fresh player in the artificial intelligence sector, Mistral AI made waves last year with a significant $112 million seed round aimed at establishing a strong European competitor to OpenAI, Anthropic, and other major AI firms.

Co-founded by veterans from Meta and Google’s DeepMind, Mistral AI is focused on developing foundational models that can compete with leading technologies like OpenAI’s GPT-4o, Anthropic’s Claude 3, and Meta’s Llama 3. The company has also made strides by releasing pre-trained and fine-tuned models under an open-source license with open weights. Notably, its offerings include Mistral 7B, Mistral 8x7B, and Mistral 8x22B, all licensed under Apache 2.0, which allows unrestricted use and reproduction as long as proper attribution is provided.

Mistral AI’s cutting-edge models, particularly Mistral Large, are proprietary and designed for repackaging as API-first products. Its first generative AI model for coding, named Codestral, is subject to a restrictive license that prohibits commercial use of its outputs. Businesses can access Mistral Large via a pay-per-use API, while the company also offers a complimentary chat assistant called Le Chat. Additionally, Mistral AI has secured distribution partnerships with cloud service providers, including Microsoft Azure — a company that also holds a minor equity stake in Mistral AI.

“I am thrilled to witness both new and existing investors reaffirm their confidence in our mission and support our growth,” stated Arthur Mensch, co-founder and CEO of Mistral AI. “This funding round positions us uniquely to advance AI technology and ensure its accessibility to everyone, while maintaining our independence under the founders’ control.”

Meanwhile, General Catalyst, which spearheaded the Series B investment, has been a long-time supporter of Mistral AI. According to the Financial Times, this funding round comprised €468 million in equity and €132 million in debt, totaling around $500 million in equity and $140 million in debt. The extensive list of investors features prominent names such as Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, Samsung Venture Investment Corporation, and Salesforce Ventures.

Other notable backers include Belfius, Bertelsmann Investment, BNP Paribas, Bpifrance's Digital Venture fund, Cisco, Eurazeo, Headline, Hanwha Asset Management, IBM, Korelya Capital, Latitude, Millennium New Horizons, Sanabil Investments, ServiceNow, and SV Angel.

Mistral AI has made significant progress over the past 18 months in developing foundational models. The upcoming challenge will be to convert this engineering success into tangible revenue by attracting corporate clients.