Paris-based AI startup Mistral made headlines recently by securing an impressive €105 million in funding just four weeks after its launch and days after hiring its first employees. Mistral’s pitch memo, although in the form of a Google document rather than a traditional slide deck, played a crucial role in convincing notable investors such as Lightspeed, French billionaire Xavier Niel, and former Google CEO Eric Schmidt.
Mistral AI is a new startup and the initial financing round has made them a new “global player” in artificial intelligence alongside other forerunners. The three French men – Timothée Lacroix, Guillaume Lample, and Arthur Mensch – fit the profile of those who are likely to receive a $113 million pre-seed check: ambitious Google’s Deep Mind and Meta alums, two of whom have diplomas from the École Polytechnique, practically the MIT of France.
Generative AI is a transformative technology
The pitch deck highlights several key points that outline Mistral’s strategic vision and market opportunity. It begins by emphasizing the transformative nature of generative AI, a technology that has witnessed a rapid acceleration in the past year. Generative AI systems can produce high-quality creative content, read and process vast amounts of unstructured data faster than humans, and execute workflows at unprecedented speeds. Mistral recognizes that generative AI has the potential to boost productivity across all sectors and create a new industry with a market size projected to reach €110 billion by 2030, growing at a rate of 35% per year. This technology has the power to enhance human capabilities and bring about positive societal changes.
An oligopoly is shaping up
The pitch also highlights the emergence of an oligopoly in the generative AI market, where a few major players, including OpenAI, dominate the field. Mistral acknowledges that the value in this market lies in the hard-to-make technology itself—the generative models. These models require extensive training on powerful machines and high-quality data sources, which present significant barriers to entry for new players. Mistral aims to become a European leader in generative AI, breaking the current US-based monopoly and addressing the geopolitical implications of this powerful technology. That round, which values the company at $260 million, is being hailed as Europe’s largest seed round to date.
Current generative AI does not meet market constraints
Mistral identifies several shortcomings in existing generative AI models. Major players like OpenAI have adopted a closed technology approach, restricting access to the model and only serving it through APIs. This limits businesses that want to utilize generative AI, as they are forced to share their valuable data with black-box models deployed in public clouds, raising safety and legal concerns. Mistral proposes a more open approach, releasing models with permissive open-source licenses, allowing customers to access the internals of the models for tighter integration with their workflows. Mistral also emphasizes the importance of data sources and control, negotiating license agreements for high-quality training data and providing on-the-fly differentiated data access to employees based on their views of the company’s intellectual property.
Mistral’s impact on the European market
To disrupt the market, Mistral plans to become a research leader in generative AI, eventually offering the best technology within four years. The company will initially specialize in the European market, leveraging the expertise of European researchers and attracting top talent. Mistral’s technological counter-positioning involves taking a more open approach to model development, providing unmatched guarantees on security and privacy, and focusing on data control. The company aims to co-build integrated solutions with European integrators and industry clients, positioning itself as the main tool for companies leveraging AI in Europe.
Roadmap
Mistral’s pitch memo also outlines its roadmap, including plans to train state-of-the-art models, develop business integration, and expand its offerings to address the shortcomings of current models. The founding team, composed of leading researchers in the field, seasoned entrepreneurs, and influential public leaders, brings a wealth of experience and connections to the table. They have already secured competitive deals for renting computational power, negotiated access to high-quality datasets, and initiated business exploration with major industrial actors.
Unlocking new possibilities
Mistral’s pitch memo highlights its ambitious vision to disrupt the generative AI market in Europe by offering more open and customizable models, addressing key market constraints, and building strong partnerships, ushering in a new era of possibilities. As a European company, Mistral exemplifies the region’s potential to disrupt industries globally, leaving a lasting impact on the market landscape. With their impressive achievements so far, it is clear that Mistral will continue to drive innovation and redefine the future of multiple industries.
