19 June 2023

European AI start-up raises €105 million weeks after launch

The recently founded startup, which is just four weeks old, has raised €105 million, a record for a seed-stage funding round in Europe. The record funding underlines the growing enthusiasm around artificial intelligence and Europe's efforts to create an alternative to tech giants such as Microsoft-backed OpenAI and Google's DeepMind.

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Mistral AI, a Paris-based startup co-founded by former employees from DeepMind and Meta, is focused on solving the most important problem in the field: making artificial intelligence truly useful. With a focus on open source solutions, Mistral AI aims to target enterprises and provide innovative AI technologies. The company plans to release its first models for text generative AI in 2024.

The funding round was led by Lightspeed Venture Partners and included participation from prominent individual investors such as French billionaires Rodolphe Saadé and Xavier Niel, along with former Google CEO Eric Schmidt. Mistral AI's fundraising success was praised by French Minister Jean-Noel Barrot as it is in line with Paris' ambition to strengthen its position as a major global technology hub. Although Paris has traditionally lagged behind tech hubs such as New York, California and London, Mistral AI's success shows the city's potential in the tech industry.

Although there has been a significant recent decline in investment in private technology companies and start-ups, AI companies have bucked this trend and have attracted significant investment. Optimism is spreading that generative AI has the potential to revolutionise industries ranging from customer service to programming. As of early 2023, several AI startups, including Anthropic, Adept and Character.AI in the US, along with German company DeepL, known for its AI-powered translation services, have reached valuations in excess of US$1 billion.