THE DECODER

Mistral AI should soon reach a market capitalization of around $100 million per employee. In the next round of funding, the French AI startup, with about 60 employees, will be valued at six billion dollars, reports the Wall Street Journal. This will triple Mistral AI's valuation within six months. Existing investors such as General Catalyst and Lightspeed Venture Partners are providing about $600 million in the new round. Mistral AI aims to compete with OpenAI and Google with lower costs and open-source models. Founded just a year ago, the company has raised €385 million to date and has partnered with Nvidia, Microsoft, and Salesforce, among others. While some of its recently released models have performed well, they are not industry-leading. Mistral also faces strong competition in the open-source space, particularly from Meta's Llama 3. It's not yet clear what the underlying business model might be for second-tier foundational AI models. Like Germany's Aleph Alpha, Mistral will likely try to serve the data-sensitive European markets.