Month-Old AI Startup Mistral Raises $113 Million

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French startup Mistral AI has reportedly raised a record $113 million in seed funding.

The company, founded by artificial intelligence (AI) vets from Google and Meta, launched just weeks ago, the Financial Times reported Tuesday (June 13).

That report notes this was the largest-ever seed round recorded in Europe, underlining the way AI continues to attract investments even in the middle of a drop in dealmaking.

“There is a rising awareness of the fact that this technology is transformative and Europe needs to do something about it, both as a regulator, as a customer and an investor,” Arthur Mensch, Mistral’s chief executive and a former DeepMind researcher, told the FT.

Sources close to the company said the round valued Mistral at $259 million. PYMNTS has contacted the company for comment but has not yet received a response.

Antoine Moyroud, whose Lightspeed Venture Partners led the funding round, said the size and speed of Mistral’s financing is a measure of its founders’ skill-set.

“There’s a pool of 80 to 100 people globally who have the level of experience they have,” Moyroud said. “Right now, for better or for worse, the capital requirements in compute and top-tier talent make [launching an AI start-up] quite a capital-intensive game.”

The FT report notes that Mistral hasn’t yet developed its first product, with staff just starting to work days ago. The company intends to launch a new large language model (LLM) early next year, similar to OpenAI’s ChatGPT.

In an interview with PYMNTS published Wednesday (June 14), Jason Verlen, senior vice president of product management at CCC Intelligent Solutions Inc., said the potential of LLM has only just begun to be tapped.

“A lot of what’s being done with large language models can actually go much further — not just improving performance, but unlocking new business use-cases [and even new businesses],” said Verlen. “The possibilities inherent in AI for driving new horizons of efficiency and productivity in the macro environment are almost unbelievable.”

Verlen, whose company provides a cloud platform for the insurance and automotive industries, is enthusiastic about the potential for AI.

“This really is an exciting time,” Verlen told PYMNTS, adding that the business world has begun to leave behind the “Wave One” of AI platforms pre-trained using public data and while shifting into what he calls “Wave Two.”

“Wave Two is where organizations take control, using generative AI on their own in-house data to solve narrower problems with domain-specific, secure, and high-provenance data.”