A French AI Startup Raises $113 Million to Compete with OpenAI
Image credit: FT
Overview
In a staggering move, Mistral AI, a four-week-old Paris-based startup, has raised $113 million in a seed funding round to enter the race of building, training, and applying large language models and generative AI. The burgeoning AI firm aims to rival giants like OpenAI.
The company is the brainchild of Arthur Mensch, Timothée Lacroix, and Guillaume Lample, who are all in their early thirties and seasoned alumni of Google’s DeepMind and Meta. They met while studying in the field of artificial intelligence, and it was the leaps OpenAI made with its GPT model that propelled them to take a deep dive into the sector.
Open Source at the Core
Despite the word "open" in OpenAI, the trio perceived a proprietary approach dominating the sector. To counter this, the co-founders decided to keep open source as a fundamental part of their DNA. They are committed to building models using only publicly accessible data, allowing users to contribute their datasets. Despite the potential for misuse, Mensch, the CEO of Mistral AI, expresses confidence that the benefits of open source will prevail.
The Enterprise Focus
An intriguing aspect of Mistral AI is its specific focus on enterprise customers. The co-founders perceive a gap in the market to assist these customers in understanding AI applications better. Their goal is to provide user-friendly tools that can be leveraged to create unique products.
The Bold Bet on Mistral AI
Despite Mistral AI not having a product or customers yet, investors are making big bets on its vision. Antoine Moyroud, who led the investment for Lightspeed Venture Partners, likens the AI landscape to broader infrastructure plays like cloud computing and database businesses. He believes that the value will accrue similarly in the AI sector, with a handful of players garnering the lion's share.
Moyroud's decision to invest was also heavily influenced by the founders' credibility. According to him, there are only 70-100 people worldwide with the expertise required for developing and optimizing language models, and Mistral AI's team is among them.
Big Tech's Competition
While tech giants like Google, Apple, Meta, Amazon, and Microsoft are poised to make significant moves in AI, the formation of startups like Mistral AI and their ability to attract funding suggests the game is far from over.
The startup, named after a north wind that signals good weather in Europe, seeks to use its funding to assemble a world-class team and create top-notch open-source models. The team at Mistral AI believes that the evolution of AI should be a global effort, and this bold move signifies their attempt to put France on the global AI map.
Key Takeaways
Mistral AI, a new Paris-based startup, raised $113 million in seed funding to compete with OpenAI in the AI sector.
The startup, co-founded by alumni from Google’s DeepMind and Meta, is committed to open-source solutions and targets enterprise customers.
Despite the risk associated with investing in a company with no product or customers yet, investors like Lightspeed Venture Partners believe in the company's vision and the founders' expertise.
Mistral AI's emergence and its successful funding round suggest that the AI sector remains open for competition, with startups challenging tech giants.
The company aims to use the funding to create a world-class team and develop high-quality open-source models, showcasing France's contribution to global AI development. Source