The AI scene has largely been dominated by the US and China over the last couple of years, but Europe finally seems to be finally throwing its hat into the ring.
France-based Mistral has raised $2 billion in a new funding round. The round was led by Netherlands-based ASML, which is world’s leading supplier of photolithography machines, which are crucial to the semiconductor industry. Existing Mistral investors including a16z, Lightspeed and General Catalyst also participated in the round. The round likely values Mistral at an estimated $14 billion, making it the most valuable AI startup out of Europe.
“This Series C funding round, led by ASML, fuels Mistral AI scientific research to keep pushing the frontier of AI to tackle the most critical technological challenges faced by strategic industries,” Mistral said.
“The collaboration between Mistral AI and ASML aims to generate clear benefits for ASML customers through innovative products and solutions enabled by AI, and will offer potential for joint research to address future opportunities,” said ASML President and Chief Executive Officer Christophe Fouquet. “We believe that this strategic partnership with Mistral AI, which goes beyond a traditional vendor-client relationship, is the best way to capture this significant opportunity. We also believe that this collaboration is value enhancing to Mistral AI.”
Mistral was founded in 2023 by Arthur Mensch, Guillaume Lample, and Timothée Lacroix, all of whom had significant experience at Google and Meta. Early on, Mistral managed to create some buzz by releasing its models which were open-source, unlike the closed-source models that were being released by OpenAI and Google at the time. One of Mistral’s core philosophies is the democratization of AI through open-source architecture, and it released model weights and technical documentation to encourage external innovation.
Mistral has produced a range of models for different use-cases, including the general-purpose Mistral Medium 3.1, Codestral for coding, and other models for voice transcription and OCR handling. It has also released the weights of many models under the Apache license including the Magistral Small 1.1, Voxtral Small and Devstral Small 1.1 models.
What’s interesting is that Mistral has now been backed by ASML. Mistral is Europe’s top AI startup, while ASML is Europe’s most prominent tech company. ASML builds the machines that are used to make chips by companies like TSMC, and has a near-monopoly in being able to create machines that can work on the most advanced chips. ASML now has a significant financial stake in Mistral, which will not only raise Mistral’s profile in the AI space, and also allow ASML to get visibility into the rapidly-advancing world of AI. More importantly, it will create a European coalition with interests in both AI and semi-conductors. US and China were thought to be running away with the AI race, but it appears that Europe is keen to give them some competition.