Mistral AI of France Rakes in $113M Seed Funding at $260M Valuation

by Nik Asti

Published: June 14, 2023 at 5:00 am Updated: June 14, 2023 at 4:48 am

by William Savage

Edited and fact-checked: June 14, 2023 at 5:00 am

In Brief

Paris based start-up Mistral AI has secured €105 million ($113 million) seed funding despite operating without a public website.

In an astonishing demonstration of the frenzied race among investors to fund AI ventures, a French start-up, Mistral AI, recently procured a staggering €105 million ($113 million) seed funding round at a valuation of €240 million ($260 million), all while operating without a publicly available website.

Mistral AI of France Rakes in $113M Seed Funding at $260M Valuation, Challenging OpenAI

Co-founded by alumni from Google’s DeepMind and Meta, the Paris-based Mistral AI is barely four weeks old. The company aims to compete with OpenAI in building, training, and applying large language models and generative AI. They’re planning on releasing their first text-based generative AI models by 2024.

The funding round, led by Lightspeed Venture Partners, included a broad range of investors spanning multiple countries, reflecting the global interest in AI technology. Other participants were Xavier Niel, JCDecaux Holding, Rodolphe Saadé, Motier Ventures in France, La Famiglia, Headline in Germany, Exor Ventures in Italy, Sofina in Belgium, First Minute Capital, LocalGlobe in the UK, and Bpifrance. Eric Schmidt, former Google CEO, also holds shares in the company.

Despite this noteworthy success, the circumstances surrounding Mistral AI’s funding underscore a critical reminder for investors in the rapidly developing AI landscape: the importance of due diligence. The “race to the bottom” culture, where investors jump on opportunities without comprehensive understanding or thorough investigation, could potentially lead to poor investment decisions.

Era of AI

This era of AI enthusiasm, where companies secure substantial funding while operating in stealth mode, suggests that investors are primarily betting on the potential of AI. However, it’s crucial for investors to have a thorough understanding of the companies they’re investing in to ensure their investments are sound and yield the desired results.

The craze around AI companies is creating an investor frenzy, as was made glaringly apparent when Mistral raised over 110 million euros without even having a website. It’s an illustration of a period we might refer to as the “wild west of AI investing,” with investors rushing to pour money into anything with the letters “AI” associated, often without sufficient due diligence.

While Mistral AI’s early success is an indicator of the potential in AI, it’s a story that underlines the importance of investor education in navigating this exciting but complex field.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti