French AI Startup, Founded By Former Google And Meta Researchers, Is Up To Challenge Silicon Valley Dominance: Report

Author: Shivani Kumaresan | May 09, 2024 12:11pm

French artificial intelligence startup Mistral AI is on the brink of securing a deal to raise capital at a valuation of $6 billion.

This marks a substantial increase from six months ago and positioning itself to compete with Silicon Valley giants in the artificial intelligence sector.

The funding round is anticipated to involve existing supporters such as General Catalyst and Lightspeed Venture Partners. It also underscores investor enthusiasm for startups navigating the competitive landscape of AI technology.

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Mistral’s endeavor to develop AI tools for various applications, ranging from writing to coding, is emblematic of the growing interest in the sector, reported the Wall Street Journal.

Amidst this enthusiasm, there is also a sense of caution, as some startups specializing in generative AI have encountered difficulties in securing financing to sustain their technological advancements.

One of the primary challenges confronting newcomers like Mistral is the formidable financial backing already allocated by tech behemoths and organizations like OpenAI, led by Sam Altman.

Despite this, Mistral, founded by former Alphabet Inc’s (NASDAQ:GOOGL) Google and Meta Platforms Inc (NASDAQ:META) researchers in Paris, has demonstrated impressive growth. The valuation reportedly spiked to over $2 billion in just a year.

Mistral CEO Arthur Mensch envisions the company as a disruptive force in the AI arena, aiming to rival industry giants by offering cost-effective AI solutions tailored for businesses, akin to OpenAI’s ChatGPT.

Additionally, Mistral advocates for open-source generative AI tools, fostering an ecosystem of users through the distribution of powerful software.

While Mistral hails from France, the participation of prominent American investors underscores the global interest in its approach to AI.

As of December, Mistral had raised just over $500 million from investors and has committed to sell partial stakes to companies involved in AI like Nvidia Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Salesforce Inc (NYSE:CRM).

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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