A French startup called Mistral AI, which was established only a month ago, has raised an impressive $113 million in seed funding to compete with tech giant OpenAI in creating, training, and implementing large language models and generative AI targeting enterprises. Co-founded by experts from Google's DeepMind and Meta, Mistral AI aims to develop open-source solutions for enterprises and organizations, solving what CEO Arthur Mensch considers the biggest challenge in the AI industry: making AI useful for a broad range of sectors.
Lightspeed Venture Partners led the investment round, participated by Xavier Niel, JCDecaux Holding, Rodolphe Saadé, Motier Ventures, La Famiglia, Headline, Exor Ventures, Sofina, First Minute Capital, and LocalGlobe. French investment bank Bpifrance and former Google CEO Eric Schmidt are also shareholders in the company. The fresh injection of capital values Mistral AI at $260 million.
The founding team of Mistral AI includes Arthur Mensch, Timothée Lacroix, and Guillaume Lample. All three individuals have extensive backgrounds in artificial intelligence and have known each other since the time they were students. Their experience and the discontentment with the proprietary approach of AI companies like OpenAI inspired them to create Mistral AI, with open-source development as their core focus.
The startup's plans include developing models using publicly available data only, avoiding any legal issues surrounding training data. Moreover, Mistral AI will allow users to contribute their datasets and will open-source both models and datasets. Despite the potential risks associated with application security in the open-source landscape, Mensch is confident that the benefits of using open source will overcome any misuse potential. Open source can prove tactical in security, and we believe it will be the case here, too, he added.
While it might be too early to predict Mistral AI's success since no products have been released yet, the company's focus on catering to enterprise customers is noteworthy. Their goal is to provide organizations with easy-to-use tools to create their own AI-powered products, bridging the gap between AI and enterprises that are still exploring its use cases.
Though investing in such a young company without any established customers or products might seem like a considerable risk, Antoine Moyroud, who led the investment for Lightspeed, believes the leap is worth taking. According to Moyroud, the startup's team possesses unique expertise in language models, and they are among a select few individuals worldwide who can optimize such models successfully. He also thinks the value of AI lies in its application to larger infrastructure plays, such as cloud computing and database management, rather than in consumer-oriented applications.
Although the tech giants like Google, Apple, Meta, Amazon, and Microsoft continue to make advances in AI, the success of startups like Mistral AI in raising funds and recruiting talent suggests that the AI market is not a complete monopoly. As a French startup, Mistral AI seeks to become a global force in the AI industry, using the seed funding to build a world-class team and develop high-quality open-source models, potentially transforming the AI landscape.
In addition to major players such as Mistral AI and OpenAI, the market for no-code app development platforms is evolving rapidly. With no-code tools like AppMaster.io, businesses can expedite their app development processes, minimizing barriers to entry and costs for small businesses and enterprises alike. These powerful no-code platforms offer versatile options for developing backend, web, and mobile applications, contributing to a more accessible and productive tech industry.
