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French artificial intelligence start-up Mistral is seeking a valuation of $10bn in its next fundraising round, as part of a push to compete with deep-pocketed US and Chinese rivals in the cutting-edge technology.
The Paris-based group is in discussions with investors, including venture capital funds and Abu Dhabi’s AI fund MGX, about raising $1bn, according to people familiar with the process. This would value Mistral at about $10bn, up from its previous valuation of €5.8bn.
The money would be used to further the commercial rollout of Mistral’s Le Chat chatbot and the continued improvement of its large language models, the people said. Talks over the fundraising have not been finalised so the valuation and proceeds could still change.
The two-year-old company is seen as Europe’s main hope for a homegrown player that can compete in the fast-developing strategic technology. French President Emmanuel Macron has been a particularly vocal supporter, arguing that Europe needs to have a “sovereign” option for AI so as not to rely solely on the US and China.
In June, the Financial Times reported that Mistral’s revenues have increased several times over since its last funding round a year ago and are on track to surpass $100mn a year for the first time, if it maintains sales momentum.
A relatively small number of large customers are driving much of that growth. Mistral had closed or was near to sealing a handful of commercial contracts, each worth at least $100mn over three to five years, the people said.
Mistral and MGX declined to comment.
Founded in 2023 by three French engineers, Mistral has pitched its model and chatbot as a more efficient and open source alternative to US rivals such as OpenAI’s ChatGPT and Google’s Gemini.
The group has also benefited from a desire from some European companies to diversify their AI technology so as not to solely use US or Chinese players. It has a contract with the French defence ministry, which is experimenting with the technology within the administration and its army.
But Mistral, which is backed by Nvidia, is far behind US leaders like OpenAI and Anthropic in terms of both fundraising and commercialisation. OpenAI is one of the most valuable private tech companies in the world with a $300bn valuation, while Anthropic is in talks to raise $5bn in a deal that would value it at $170bn.
The start-up has bet on making its technology more “open” so users can customise it — but it also faces competition from China’s DeepSeek and Meta’s Llama in this area.
Mistral, which raised €600mn at its last fundraising in June 2024, could also use the additional funding for an ambitious programme to expand its AI infrastructure by building a large data centre outside Paris, alongside partners.
The plan was unveiled in May and could cost around €8.5bn with MGX, AI chip leader Nvidia, and state-backed BPI France, among those pledging their involvement.
French bank BNP Paribas, insurer AXA, and container shipping group CMA-CGM, whose billionaire owner is a Mistral investor, are among Mistral’s current customers. Its investors include VC firms Lightspeed and General Catalyst, BPI France and French tech investor Xavier Niel.
Additional reporting by Chloe Cornish in Dubai and Tim Bradshaw and Melissa Heikkilä in London