Samsung leads $3.5B Mistral raise, pushing valuation past $21B

French AI startup Mistral announced Tuesday it has secured €3 billion ($3.5 billion) in new funding, led by memory chip giant Samsung, as it positions itself as Europe's answer to OpenAI and Anthropic.

The round also included the EU-backed Scaleup Europe Fund, managed by EQT, and existing investor PSG Equity. The investment values Mistral at over €21 billion post-money, up from €11.7 billion a year ago when Dutch chip equipment maker ASML led a previous round.

CEO Arthur Mensch told CNBC the money will fund infrastructure expansion, including building its own data centers and renting out computing capacity. He said the company plans to fully own its compute capacity within five years, growing it by around 100% annually, and will train "bigger and faster models."

Mistral differs from US rivals by working closely with individual companies to create custom AI tools. It already integrates AI into ASML's manufacturing processes and plans similar work with Samsung. Mensch said he expects annual recurring revenue to exceed $1 billion this year, and with the new funding, "to be beating" that figure if current trends hold. He declined to provide a revised number.

The company markets itself as a non-US, non-Chinese "sovereign AI" option for Europe and other regions, focusing on open-weight models rather than proprietary systems. Mensch acknowledged intense competition from Chinese AI labs but argued that Chinese models aren't reliably available for long-term enterprise use outside China, citing potential export restrictions and unclear upgrade paths.

"At this point in time, we are seeing that the volatility in this space is actually quite extreme," Mensch said. He stressed that customers need a guarantee of access to better models a year from now, which only comes from training models in-house. Mistral says Chinese models can run on its infrastructure without creating strong dependency, as data stays with Mistral. The Scaleup Europe Fund's backers include the European Commission, Novo Holdings, and Santander.

Source: CNBC