Based in Paris Mistral AI, a startup working on large open-source language models — the basis for generative AI services — has raised $6 billion in funding, triple its December valuation, to higher compete with the likes of OpenAI and Anthropic, TechCrunch has raised funding, I’ve learned from many sources. We know from close sources that DST, together with General Catalyst and Lightspeed Venture Partners, want to participate in this round.
DST – an investor heavyweight led by Yuri Milner, who has been a significant backer of some of the biggest names in tech, including Facebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba and ByteDance – is a latest name that has not been previously reported ; Both GC and LSVP are previous sponsors and their names have been reported earlier today also via WSJ. The round is expected to be around but lower than $600 million, sources told TechCrunch.
We can even confirm that one company that has been mentioned multiple times – SoftBank – is not currently included in the transaction.
“SoftBank is not included in the frame,” a person close to SoftBank told TechCrunch. This also lines up with what our sources have been telling us since March when this round began, although not everyone seems to be of the same opinion: since then, multiple reports have linked SoftBank to the Mistral investment.
Sources say Mistral’s round is based on strong inbound interest and has been in the works since March or possibly earlier, just months after Mistral closed a $415 million round at a $2 billion valuation.
Mistral, according to PitchBook datahas roughly 36 current investors, and the list also includes the likes of Andreessen Horowitz (which led the Series A in December), Redpoint, Headline, New Wave, Emerson Collective, French banking giants bpifrance and BNP Paribas, in addition to a variety of strategic sponsors, including Databricks, Nvidia, Salesforce, Snowflake, and most recently OpenAI’s largest sponsor, Microsoft.
This latest fundraising has been the subject of much speculation in recent months (see Here, Here AND Here), but it was a moving goal, and investors, round size and valuation modified. Some investors looked around and left, probably because of the price.
“We love this company and we love Arthur,” one distinguished investor told me this week, referring to Arthur Mensch, CEO and co-founder. “We like the speed they’re moving at, but that’s not what we’re talking about.”
Mistral, unlike some other LLM builders comparable to OpenAI and Anthropic, focuses on an open-source approach to its work. It is one of the youngest LLM players on the market, also distinguished by the undeniable fact that it put a lot of effort into leaving Europe (“European Champion” because it is sometimes called). Its French roots also reach Paris, which is a significant center for artificial intelligence research and development, where Meta, Hugging Face, Photoroom, Nabla and many others are created.
What’s significant about Mistral AI, which was valued at $6 billion (post-money, sources confirmed), is that the valuation rose from its $5 billion goal in a matter of weeks.
Since Mistral released its first LLM in September 2023, it released Two more. However, he did not disclose how many users he has or what his revenues are (it offers, among others, price range to access their APIs, with token-inclusive pricing plans for the three models released so far, in addition to some customizations created by Mistral).
All because of this for now it is unclear how much investor interest is tied to current business paths versus optimistic future forecasts.
This points to a very popular market for startups and for AI in general – despite the exit challenges that personal technology firms face as they scale up.
SoftBank side step
It’s true that SoftBank is keen to do more AI deals, even if it’s not investing in Mistral (not immediately, anyway). On the back A return, good performance earlier this yr, as a part of the Vision Fund, the company increased its activity in the field of artificial intelligence. This includes spending a whole lot of hundreds of thousands of dollars lead Wayve’s $1 billion financing round earlier this week.
Sources close to Graphcore confirmed to TechCrunch that SoftBank is indeed considering a possible purchase of the also-troubled British AI chip designer – confirming other reports over the past few months.
Graphcore’s story is one of AI clouds relatively than silver linings, and is emblematic of some of the issues some later-stage startups are currently struggling with. The chip design company saw the opportunity for more efficient AI chips early on, and with an interesting IP in hand, has raised a whole lot of hundreds of thousands of dollars over the years from investors like Sequoia, Microsoft, Dell Technologies and individuals like Greg Brockman and Ilya Sutskever OpenAI and many others .
However, this is happening in a market completely dominated in terms of sales and knowledge sharing by the fundamental player, Nvidia. Graphcore’s last fundraising, estimated at $2.8 billion, was over three years ago, and it’s slowly approaching the end of its runway. This has led to much speculation about it being sold for a much lower amount, or potentially even for that quantity 500 to 600 million dollars. However, we understand that the startup has had better-than-expected revenue over the past few months, which has each prolonged its runway and likely given it more options.
Our source says SoftBank would even be in talks with Graphcore about investing, so that might even be one of the outcomes. “Stretching” is how one investor described rumors that SoftBank was close to making a deal one way or the other.
But SoftBank has a special place in its heart for tokens. It still owns a huge chunk of Arm, and the company is working on a $100 billion fund dedicated solely to AI chips. It’s not just software: the company is actually considering partnering with Graphcore, a British AI chip designer.
Mistral declined to comment for this story. DST and General Catalyst did not respond to requests for comment. LightSpeed declined to comment on the speculation. We will update as we learn more.