France's rising tech star Mistral AI has been making waves in the AI world lately. Founded in 2023, this Paris-based startup has quickly become Europe's best shot at competing with OpenAI, though it still has a long way to go despite its massive $6 billion valuation.
Their AI assistant, Le Chat, just hit mobile app stores and caused quite a stir - especially back home in France. Even President Macron jumped on the bandwagon, telling people to "Go and download Le Chat, which is made by Mistral, rather than ChatGPT."
But can Mistral really challenge the big players while staying true to its mission of being "the world's greenest and leading independent AI lab"? Let's take a closer look.
What is Mistral AI and what do they offer
(Image Source: Mistral AI)
Since launching in 2023, Mistral has raised huge amounts of money with a simple mission: "put frontier AI in the hands of everyone." It's a not-so-subtle dig at competitors, highlighting Mistral's commitment to openness in AI development.
Their ChatGPT alternative, Le Chat, recently landed on iOS and Android, hitting 1 million downloads within two weeks and even becoming the top free download in France's App Store.
But Mistral offers more than just chat. Their model lineup includes:
Mistral Large 2 (their main large language model)
Pixtral Large (for handling images and text)
Codestral (specialized for coding)
"Les Ministraux" (models that work on phones and other small devices)
Mistral Saba (focused on Arabic language)
They also launched Mistral OCR in March 2025, which turns PDFs into text so AI models can process them more easily.
Who founded Mistral AI and their background
Mistral was founded by three AI researchers who previously worked at major American tech companies with Paris offices. CEO Arthur Mensch came from Google's DeepMind, while CTO Timothée Lacroix and chief scientist Guillaume Lample both worked at Meta.
Their advisory team includes Jean-Charles Samuelian-Werve and Charles Gorintin from health insurance startup Alan, along with former digital minister Cédric O (whose involvement raised some eyebrows due to his government background).
Is Mistral AI truly open source
Not entirely. Mistral splits its offerings between premium models (which aren't available for commercial use) and free models that come with weight access under the Apache 2.0 license.
One of their free models is Mistral NeMo, which they built with Nvidia and open-sourced in July 2024.
How they generates revenue
While many Mistral products are free or have free options, they've started monetizing through Le Chat's paid subscription. Their Pro plan costs $14.99 monthly, launched in February 2025. For business customers, Mistral charges for API access to their premium models with usage-based pricing. Companies can also license these models directly, and Mistral likely earns significant revenue from their strategic partnerships. That said, sources suggest Mistral's revenue is still only in the tens of millions - not yet matching their multi-billion valuation.
Major partnerships
In 2024, Mistral partnered with Microsoft, which included distributing their AI models through Azure and a €15 million investment. The UK's Competition and Markets Authority (CMA) quickly decided the deal was too small to investigate, though it raised some concerns in the EU.
Other important deals include:
A partnership with Agence France-Presse (AFP) giving Le Chat access to their entire text archive back to 1983
Agreements with France's military and job agencies
Partnerships with shipping company CMA, German defense tech startup Helsing, IBM, Orange, and Stellantis
Funding history
As of February 2025, Mistral has raised about €1 billion (roughly $1.04 billion). This includes debt financing and several quick succession equity rounds.
Their June 2023 seed round was a European record-breaker at $112 million, valuing the month-old company at $260 million. Investors included Lightspeed Venture Partners, Bpifrance, Eric Schmidt, and several others. Just six months later, they closed a $415 million Series A at a $2 billion valuation, led by Andreessen Horowitz (a16z).
Microsoft's $16.3 million investment came as part of their partnership in February 2024, described as a Series A extension.
By June 2024, they raised another €600 million ($640 million) in combined equity and debt, led by General Catalyst, which pushed their valuation to $6 billion. This round included investments from Cisco, IBM, Nvidia, and Samsung.
Future plans and challenges
CEO Arthur Mensch made it clear at Davos in January 2025: Mistral is "not for sale" and an IPO is "the plan." This makes sense given their massive funding - even a large acquisition might not satisfy investor expectations, not to mention concerns about European tech sovereignty. But to justify that $6 billion valuation, they'll need to significantly grow their revenue. Whether they can truly challenge OpenAI's dominance remains to be seen, but one thing's for sure - they're Europe's best shot at creating a homegrown AI champion.
