Mistral AI is in investment talks with tech investor Andreessen Horowitz and could soon reach a valuation of nearly $2 billion, according to Bloomberg.
French AI startup Mistral AI is raising around €450 million ($487 million) in a funding round led by tech investor Andreessen Horowitz, Bloomberg writes. Nvidia and Salesforce also participated in the round. The funding would value the company, which is in direct competition with OpenAI, at around $2 billion.
According to Bloomberg, the funding includes more than €325 million in equity from investors, with Andreessen Horowitz itself planning to invest €200 million. Nvidia and Salesforce have pledged to contribute a further €120 million in the form of convertible notes. However, some details of the deal could still change.
Mistral AI was founded by former DeepMind and Meta AI researchers and has become one of the leading AI start-ups in Europe.
Mistral has released Mistral 7B, a successful open-source language model.
Mistral AI, which previously raised €105 million in funding without presenting a product, plans to challenge OpenAI with an open-source approach to generative AI. The company is focusing on the European market, with an emphasis on privacy, security, and customizable models for enterprises. To compete with the Microsoft-backed OpenAI, Mistral AI needs significant funding to further develop its AI models and expand its presence in Europe.
In September, the start-up released its first language model, Mistral 7B, with 7.3 billion parameters, which outperformed larger models such as Meta's Llama 2 in benchmarks and is available under the Apache 2.0 license. The team plans to release a range of text generation models by the end of 2023 that will be more powerful than GPT-3.5 and Google Bard.
The investment could see Mistral overtake Germany's Aleph Alpha
According to Bloomberg, the new investment brings Mistral AI closer to a $2 billion valuation, putting it ahead of German start-up Aleph Alpha. Aleph Alpha raised more than $500 million in a Series B funding round in November from investors including Innovation Park Artificial Intelligence, Bosch Ventures, the Schwarz Group, and SAP.
Aleph Alpha focuses on explainable and trustworthy approaches to generative AI and operates one of the fastest commercial AI data centers in Europe.