based in Paris Mistral AI, a startup that works on open-source models of large languages — the building block for productive AI services — has raised $6 billion in funding, triple its valuation in December, to compete more strongly with OpenAI and Anthropic, the TechCrunch has learned from several sources. We understand from close sources that DST, along with General Catalyst and Lightspeed Venture Partners, all want to participate in this round.
DST — a heavyweight investor led by Yuri Milner that has been a notable backer of some of the biggest names in tech, including Facebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba and ByteDance — is a previously unheralded new name. GC and LSVP are both previous supporters and their names were mentioned earlier today also from the WSJ. The round is expected to be around but less than $600 million, sources told TechCrunch.
We can also confirm that one company that has been mentioned many times – SoftBank – is not currently involved in the deal.
“SoftBank is not in the frame,” a SoftBank insider told TechCrunch. This also lines up with what our sources have been telling us since March, when this round first opened, though it appears not everyone is on the same page: Multiple reports have linked SoftBank to a Mistral investment since then.
Mistral’s round is based on strong inbound interest, sources tell us, and has been in the works since March or possibly earlier, just months after Mistral closed a $415 million round at a $2 billion valuation.
Mistral, according to PitchBook datahas around 36 current investors, with the list also including Andreessen Horowitz (which led its Series A in December), Redpoint, Headline, New Wave, Emerson Collective, French banking giants bpifrance and BNP Paribas, as well as several strategic backers including of Databricks, Nvidia, Salesforce, Snowflake and most recently OpenAI’s biggest supporter, Microsoft.
This latest fundraiser has been the subject of much speculation in recent months (see here, here and here), but it was a moving target, with investors, round size and valuation changing. Some investors looked and walked away, possibly because of the price.
“We love the company and we love Arthur,” one prominent investor told me this week, referring to Arthur Mensch, the CEO and co-founder. “We love how fast they move, but we don’t talk.”
Mistral, unlike some of the other LLM builders such as OpenAI and Anthropic, focuses on the open source approach to its work. It is one of the youngest LLM players in the market, and notable also for the significant effort to exit Europe (a “European champion“, as it is sometimes called). Its French roots are also in Paris as a notable hub for AI R&D, with Meta, Hugging Face, Photoroom, Nabla and many others building there.
What’s significant about Mistral AI garnering a $6 billion valuation (post money, sources confirmed) is that the valuation has grown from its $5 billion target in a matter of weeks.
Since Mistral started first LLM in September 2023, has been released two more. However, it has not disclosed how many users it has or what its revenue is (it offers a price range for access to its APIs, with pricing plans that cover the three models it’s released to date, as well as some Mistral-built customisations).
All of this means that it is currently unclear how closely investor interest is tied to current business pipelines versus hopeful projections for the future.
This points to a very hot market for the startup and for AI in general — despite the exit challenges faced by scaling, private tech companies.
SoftBank side step
The is It’s true that SoftBank is very willing to participate in more AI deals, even if it doesn’t invest in Mistral (not now, anyway). At the back of a recovery strong performance for the Vision Fund earlier this year, the company is developing more AI activity. This included cutting hundreds of millions of dollars to lead a $1 billion funding round for Wayve earlier this week.
And sources close to Graphcore confirmed to TechCrunch that SoftBank is indeed possibly looking at buying the troubled UK AI chip designer, confirming other reports from the past several months.
Graphcore’s background is one of cloud AI rather than a silver lining, and is emblematic of some of the problems some later-stage startups are seeing right now. The chip designer spotted the opportunity for more efficient AI chips early on, and with some interesting IP in hand, has raised hundreds of millions of dollars over the years from investors like Sequoia, Microsoft, Dell Technologies, and the likes of Greg Brockman and Ilya Sutskever of OpenAI, among many others.
But it’s in a market that’s completely dominated in sales and opinion by one major player, Nvidia. Graphcore’s last fundraising, at a valuation of $2.8 billion, took place more than three years ago now and is nearing the end of its runway. This has led to a lot of speculation about it being sold for much less than that, possibly for barely between $500 and $600 million. But we understand that the startup has had better-than-expected revenue in recent months, which has widened its runway and possibly given it more options.
SoftBank has also been talking to Graphcore about investing, we understand from our source, so that could also be an outcome. “Stretching it out” is how one investor described rumors that SoftBank was anywhere close to a deal one way or another.
But SoftBank has a special place in its heart for brands. He still owns a huge chunk of Arm, and the company is working on a $100 billion fund just for AI chips. This doesn’t just cover software: The company is actually looking at getting involved with Graphcore, a UK-based AI chip designer.
Mistral declined to comment for this story. DST and General Catalyst have not responded to requests for comment. LightSpeed declined to comment on speculation. We’ll update as we learn more.
