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Mistral AI’s valuation soars to a huge $6 billion; SoftBank opts out, while DST jumps in.

ByYasmeeta Oon

May 12, 2024
Mistral AI's valuation soars to $6 billion; SoftBank opts out, while DST jumps in.

Mistral AI’s valuation soars to a huge $6 billion; SoftBank opts out, while DST jumps in.

In a bid to fortify its position in the competitive landscape of generative AI, Mistral AI, headquartered in Paris, has successfully raised $600 million at a valuation of $6 billion. This substantial increase, marking three times its valuation from December, underscores Mistral’s determination to rival industry giants such as OpenAI and Anthropic. The financing details were disclosed by sources close to the matter, shedding light on the involvement of prominent investors like DST, General Catalyst, and Lightspeed Venture Partners.

InvestorsAmount InvestedPrevious BackingNotable Investments
DSTTo be ConfirmedNewFacebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba
General CatalystTo be ConfirmedExistingNot Available
Lightspeed VentureTo be ConfirmedExistingNot Available
Sources: TechCrunch, WSJ

DST, led by Yuri Milner, renowned for its strategic investments in technology behemoths like Facebook, Twitter, and Alibaba, emerges as a fresh participant in Mistral’s funding round. While General Catalyst and Lightspeed Venture Partners, both previously associated with Mistral, are expected to continue their support. Although the round’s exact size is yet to be finalized, estimates hover around the $600 million mark.

Contrary to speculations, SoftBank, a prominent player in the AI investment landscape, has refrained from participating in Mistral’s funding round. A SoftBank spokesperson confirmed the company’s non-involvement, aligning with earlier indications since the round’s initiation in March. Reports linking SoftBank to Mistral’s investment surfaced intermittently, but the absence of a deal substantiates the firm’s disengagement from the current proceedings.

Mistral’s fundraising campaign, fueled by substantial inbound interest, commenced as early as March, swiftly following a $415 million round at a $2 billion valuation. With approximately 36 investors already on board, including heavyweights like Andreessen Horowitz and strategic partners such as Databricks and Nvidia, Mistral embodies a collaborative ecosystem fostering innovation in the AI domain.

The surge in Mistral’s valuation to $6 billion underscores its swift ascent in the market, buoyed by its commitment to an open-source approach in developing large language models (LLMs). Positioned as a frontrunner among European AI champions, Mistral epitomizes Paris’s burgeoning AI landscape, complemented by other notable entities like Meta and Hugging Face.

Since unveiling its first LLM in September 2023, Mistral has expanded its repertoire with two subsequent releases, signaling its aggressive expansion strategy. Despite the absence of concrete user metrics and revenue figures, Mistral’s pricing plans encompassing API access reflect its commitment to democratizing AI technologies. However, investor enthusiasm appears to transcend current performance metrics, suggestive of a market driven by anticipations of future growth prospects.

In contrast to its counterparts, Mistral distinguishes itself through its open-source ethos, a strategic differentiator in an industry dominated by proprietary platforms. As the youngest entrant in the LLM arena, Mistral’s trajectory exemplifies Europe’s emergence as a formidable AI hub, challenging the dominance of Silicon Valley incumbents.

SoftBank’s decision to abstain from Mistral’s fundraising mirrors its broader reorientation towards AI investments, epitomized by recent endeavors like the $1 billion funding injection into Wayve. Amid speculations surrounding its potential acquisition of Graphcore, a UK-based AI chip designer, SoftBank’s renewed focus on AI hardware underscores its ambition to diversify its technology portfolio.

Graphcore’s narrative, fraught with challenges amid Nvidia’s market dominance, highlights the precarious landscape confronting late-stage startups. Despite Graphcore’s commendable revenue performance in recent months, its valuation has dwindled, precipitating conjectures about an acquisition at a fraction of its previous worth.

Mistral’s meteoric rise, exemplified by its latest valuation milestone, epitomizes the fervent investor interest in the burgeoning AI sector. As the company navigates the complexities of scaling amidst intensifying competition, its commitment to open-source principles and collaborative innovation remains pivotal. Meanwhile, SoftBank’s strategic recalibration underscores the evolving dynamics within the AI investment landscape, heralding a new era of technological innovation and strategic partnerships.

Mistral, DST, General Catalyst, and Lightspeed Venture Partners declined to provide additional comments, signaling the confidentiality surrounding ongoing negotiations. As developments unfold, TechCrunch will continue to monitor the evolving landscape, providing timely updates on the intersection of technology and investment.


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Featured Image courtesy of DALL-E by ChatGPT

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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