French Startup Mistral AI Raises $650 Million in Bid to Scale Up

By Mauro Orru

Mistral AI raised 600 million euros ($646 million) from Nvidia, Salesforce and other investors as the French startup looks to gain scale in a market dominated by ChatGPT maker OpenAI and Silicon Valley giants.

The announcement comes a month after The Wall Street Journal reported that Mistral AI was nearing a deal to raise funds at a roughly $6 billion valuation, handing the French startup added fuel to challenge big tech firms in the artificial-intelligence race.

Backers include General Catalyst, Lightspeed, Bertelsmann Investment, Cisco Systems, International Business Machines, Nvidia and Salesforce Venture. The capital injection underscores investors' willingness to pour funds into what they see as promising AI startups that could one day compete with bigger rivals like Microsoft-backed OpenAI and Alphabet's Google.

Another startup, iGenius, is seeking EUR650 million to bolster its generative AI offering for organizations in finance and government. Founded in 2016, iGenius counts Angel Capital Management and Eurizon Asset Management among its investors. The company, whose valuation exceeds $1 billion, has a presence in New York and Milan.

Mistral AI said its new funding round brings the total amount it raised in less than a year to more than EUR1 billion as the Paris-based company seeks to expand its presence and grow in the U.S. The investment should help the lean company with roughly 60 employees to recruit top talent and expand internationally following the opening of its California office.

The company, valued at over $2 billion in December, was founded a year ago by researchers for Google and Meta Platforms. Mistral had raised just over $500 million from investors as of December, while also committing to sell small stakes to companies like Nvidia, Microsoft and Salesforce.

Chief Executive Arthur Mensch said the latest investment safeguards Mistral's independence, which remains fully under the founders' control.

News Corp, owner of The Wall Street Journal and Dow Jones Newswires, has a content-licensing partnership with OpenAI.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

June 11, 2024 12:42 ET (16:42 GMT)

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