Mistral's revenue grows 20x in one year as Europe pushes for AI independence

French AI startup Mistral reports an annualized revenue run rate of over $400 million. Europe's growing desire for digital sovereignty is driving the business.

French AI startup Mistral, founded in 2023, has increased its revenue twentyfold within a single year, according to the Financial Times. CEO Arthur Mensch told the FT that the annualized run rate now sits at over $400 million, up from $20 million a year ago. The company aims to hit the $1 billion mark in annual recurring revenue by the end of the year.

Mistral's customer base includes more than 100 enterprise clients such as ASML, TotalEnergies, and HSBC, along with government partnerships in France, Germany, Luxembourg, Greece, and Estonia. Around 60 percent of the company's revenue comes from Europe.

Fear of tech decoupling is fueling demand for European AI

Beyond years of efforts toward European digital sovereignty, the growth is largely driven by rising concerns that Trump's foreign policy could force a technological decoupling. The EU currently sources more than 80 percent of its digital services from foreign providers, most of them American.

Mensch says Europe has realized that its dependence on US digital services was excessive and has now reached a breaking point. Mistral offers models, software, and compute that are fully independent of US players, he told the FT. Just a year ago, many had written off the startup in an AI race dominated by US and Chinese companies. That said, some of Mistral's offerings still rely on servers from American hyperscalers.

Mistral is investing $1.3 billion in Swedish data centers

Mistral wants to change that and is investing 1.2 billion euros (roughly $1.3 billion) in AI data centers in Sweden - its first facility outside France. According to Mensch, it does nations little good to only build data centers for US hyperscalers. Together with EcoDataCenter, Mistral plans a 23-megawatt site set to go online next year. Mensch says Sweden is attractive because its energy is low-carbon and relatively cheap.

The vertical integration serves a dual purpose: during the day, the infrastructure handles customer workloads, while at night Mistral uses the same chips to train new models.

Mensch says an IPO isn't necessary this year thanks to available debt financing, but Mistral has one on its long-term radar. OpenAI and Anthropic are both heading toward IPOs later this year.