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Microsoft Made a $16 Million Investment in Mistral AI
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Reports Microsoft's €15M investment in Mistral AI and their Azure distribution partnership, illustrating the consolidation of AI industry power among a few major players and raising regulatory concerns relevant to AI governance.
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Summary
Microsoft invested €15 million in Paris-based Mistral AI as part of a distribution partnership giving Azure customers access to Mistral's models. Mistral simultaneously launched Mistral Large, a closed-source GPT-4 rival. The deal attracted European Commission scrutiny amid broader regulatory concerns about Big Tech investments in AI startups.
Key Points
- •Microsoft invested €15M (~$16.3M) in Mistral AI as a Series A extension, giving it less than 1% equity at Mistral's ~$2B valuation.
- •Mistral AI launched Mistral Large, a closed-source flagship LLM designed to rival GPT-4 and Claude 2, accessible via API.
- •A distribution partnership with Microsoft makes Mistral models available through Azure's model catalog alongside OpenAI and Meta's Llama models.
- •The European Commission announced it would scrutinize the Microsoft-Mistral deal as part of ongoing oversight of Big Tech/AI company relationships.
- •The deal signals Mistral AI moving away from its open-source roots, raising questions about European AI sovereignty.
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Yesterday, Mistral AI , a Paris-based AI startup working on foundational models, announced a new large language model that could rival OpenAI’s GPT-4 , a chat assistant and a distribution partnership with Microsoft. But Microsoft and Mistral AI buried the news — or at least an important part.
As part of the partnership, Microsoft is investing €15 million ($16.3 million at today’s exchange rate) in the French startup. Mistral AI says that this an addition to the Series A funding round that was announced a couple of months ago — it could be considered as a Series A extension. It means that the valuation of Mistral AI isn’t changing following this investment.
Mistral AI reached a valuation of about $2 billion following its most recent funding round in December 2023. At the time, the company raised €385 million (around $415 million), with Andreessen Horowitz (a16z) leading the Series A investment round. The company had previously raised a $113 million seed round just a few weeks after its inception.
Microsoft says that this investment will officially convert into equity in Mistral’s next funding round. However, as Microsoft’s investment is based on the Series A valuation, it means that Microsoft will own less than 1% in equity in the French AI company.
Mistral AI releases new model to rival GPT-4 and its own chat assistant
Yesterday, Mistral AI unveiled Mistral Large , its flagship large language model that has been designed to rival other top-tier models, such as GPT-4 and Claude 2. Unlike previous Mistral AI releases, Mistral Large isn’t open source. Developers can access the model through Mistral’s own API platform.
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Mistral AI and Microsoft also signed a distribution partnership deal for Azure. As a result, Mistral AI will likely attract more customers with this new distribution channel.
It also means that Azure customers can access Mistral’s models through Azure’s model catalog. Customers who want to remain in the Microsoft ecosystem have another option in addition to OpenAI’s models. Meta’s Llama models are also available on Azure.
With this investment, Microsoft is now an investor in Op
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