Mistral AI Triples Valuation with New $640 Million Raise

Paris-based artificial intelligence startup Mistral AI has achieved a significant milestone, raising a staggering €600 million (approximately $640 million) in funding. This substantial investment has catapulted the company's valuation to an impressive $6 billion, a testament to its rapid growth and potential in the AI industry.

Mistral AI's latest funding round not only sets a record for a startup developing large-scale general-purpose AI models outside of Silicon Valley but also bolsters its position to compete with the leading AI companies in the Valley.

A recent report reveals Mistral's latest funding consists of €468 million ($502 million) in equity and €132 million ($141 million) in debt.

Mistral AI's new Series B funding round has attracted significant investments from established backers such as General Catalyst and Lightspeed Venture Partners, further solidifying the startup's position in the AI market.

"We are grateful to our new and existing investors for their continued confidence and support for our global expansion. This will accelerate our roadmap as we continue to bring frontier AI into everyone's hands," he wrote.

Rapid Growth and Ambitious Goals

Devendra Chaplot, a researcher at Mistral AI, also echoes Mensch's enthusiasm for this funding. "With a $640 million raise at a $6 billion+ valuation, Mistral AI has grown ~3x in valuation since December and ~25x in the last 12 months!" Chaplot stated.

Meta and Google's DeepMind alums co-founded Mistral AI in April 2023. The company aims to create foundational models rivaling today's best-performing models. These include OpenAI's GPT-4, Anthropic's Claude 3, and Meta's Llama 3.

Innovative AI Models

Mistral AI's innovative AI models, including Mistral 7B, Mistral 8x7B, and Mistral 8x22B, are available under an open-source Apache 2.0 license, allowing for unrestricted use and reproduction with proper attribution.

The company's most advanced offerings, like Mistral Large, are proprietary. They are intended to be repackaged as API-first products. Companies can use Mistral Large through an API that they'll have to pay for according to usage.

The company also offers a free chat assistant called Le Chat. Meanwhile, Codestral, its first generative AI model for coding, has a restrictive license.

Early Success and Recognition

In June 2023, Mistral AI secured €105 million ($113 million) from a founding round led by Lightspeed Venture Partners. This achievement is particularly noteworthy, considering the funding was secured shortly after the company's launch.

Jean-Nöel Barrot, the former minister in charge of digital transition and telecommunications in France, acknowledged Mistral AI's achievement. "Congratulations to the startup Mistral AI, which raised €105 million only one month after its creation. It is a record!" Barrot said.

Investors Bullish on AI Growth Despite Recognized Risks

Investors' confidence in generative AI startups like Mistral AI is plausible. A recent survey from McKinsey shows that 67% of the respondents expect their organizations to invest more in AI over the next three years.

Despite the potential, the survey noted that while businesses begin to see the benefits of generative AI, they also recognize the diverse risks associated with the technology.

These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which focus on inaccurate output or lack of explainability.

However, KPMG experts believe blockchain technology could solve companies' challenges in safeguarding their IP and avoiding infringement.

Blockchain technology could offer a secure and immutable way to track and manage IP, ensuring attribution and potential royalties for reused content and reducing the risk of IP misappropriation.

For instance, a company could store its IP as non-fungible tokens (NFTs) with embedded intelligent contracts on a blockchain, specifying the terms of use for generative AI. This approach could help prevent unauthorized use of proprietary data and ensure proper credit or compensation.

Ultimately, it can help companies leverage artificial intelligence's benefits while mitigating risks associated with IP protection and legal challenges.