Generative AI startup Mistral AI secures $415 million in second funding round

French open-source AI startup Mistral AI said on Monday it had raised 385 million euros (about $415 million) in its second funding round in seven months, led by investors such as Andreessen-Horowitz and LightSpeed Ventures.

The funding comes less than a week after Bloomberg broke the news that the Paris, France-based  Mistral AI was near a $2 billion valuation with backing from Andreessen Horowitz, Nvidia, and others.

While the exact valuation was not disclosed by the company, a source familiar with the situation estimated it to be around 2 billion euros. This valuation would position Mistral AI among the top AI companies globally. The Paris-based company, founded by former researchers from Meta and Google AI, had previously raised 105 million euros in June, just a month after its establishment.

Among Mistral AI’s backers are notable names such as Salesforce, BNP Paribas, General Catalyst, La Famiglia, Eric Schmidt, New Wave, Motier Ventures, and Sofina.

In an interview with the New York Times, Anjney Midha, a partner at Andreessen Horowitz, expressed the view that “We just believe A.I. should be open.” He argues that the open-source approach has become standard in almost every other facet of technology, encompassing computer operating systems, programming languages, databases, and beyond.

In addition to the funding, Mistral AI also introduced Mixtral 8x7B, an open model aspiring to be Europe’s counterpart to AI platforms like OpenAI’s ChatGPT and Google’s Bard. The Mistral AI platform is currently in beta access and is expected to be fully operational by early 2024.

The company has actively advocated for modifications to the EU AI Act, which is progressing toward becoming law, garnering support from the French government. However, Mistral AI has not yet commented on the recent developments in the AI legislation deal reached on Friday.

Founded in 2023 by Arthur Mensch (CEO), Guillaume Lample, and Timothee Lacroix, Mistral specializes in developing large language models and various AI technologies. The company’s name, derived from a northern winter wind, reflects its aspirations to become a significant player in the AI domain. Mistral shared its goals, aiming to achieve cutting-edge AI capabilities in the coming months while focusing on developing products tailored for both developers and enterprises.