According to Yahoo News, Mistral AI, a rival to OpenAI, is close to finalizing a funding round of approximately €450 million ($487 million) from investors including Nvidia Corp. and Salesforce Inc., valuing the company at around $2 billion. The funding round features over €325 million in equity from investors led by Andreessen Horowitz, which is in discussions to invest €200 million. Nvidia and Salesforce have agreed to contribute an additional €120 million in convertible debt.
The startup's three co-founders have agreed to sell more than €1 million each in equity as part of the deal, according to transaction documents reviewed by Bloomberg. Three other Mistral insiders, including Cedric O, the former French minister who serves as the company's chief adviser, are set to offload shares. O plans to sell nearly €1 million, as per the term sheet.
The $2 billion valuation for the less-than-a-year-old company highlights the tech industry's optimism about the future potential and profitability of artificial intelligence firms. Mistral develops open-source software for chatbots and other generative AI tools, claiming to be less expensive and more efficient than its US counterparts. The company, founded by former scientists from Alphabet Inc.'s DeepMind and Meta Platforms Inc., has become one of Europe's most prominent AI startups. In June, Mistral raised a $113 million initial round, a significant amount for a European tech startup.
General Catalyst, Lightspeed Venture Partners, Bpifrance, and others also participated in the funding round, according to the documents.
