Recipient of Europe's largest ever seed round doesn't even have a product
Can you guess what it is yet? Here's a clue: It starts with 'A' and ends with 'I'
The French recipient of Europe's largest ever seed round doesn't have a product and was founded four weeks ago. The few employees it has only started work in the last few days.
All the same, Mistral AI hoovered up €105 million ($113 million) from lead investor Lightspeed Venture Partners with contributions from Eric Schmidt, French telecoms billionaire Xavier Niel, and state-backed investment bank Bpifrance.
The clue as to why the Paris-based startup is now valued at €240 million ($259 million) could be as simple as its name. New AI companies in the US inhaled as much as $25 billion from venture capitalists in the first three months of 2023, and with the artificial intelligence bubble centered on the States, Europe has yet to respond in kind.
There is also the small matter of personnel. Mistral AI chief exec Arthur Mensch used to be a researcher with Google DeepMind and founded the new company with Meta alumni Timothée Lacroix and Guillaume Lample.
Presumably these credentials, combined with the promise of a homegrown European AI, are all it takes for investors to part with millions these days.
Lightspeed partner Antoine Moyroud sure seems to think so. He told the Financial Times "There's a pool of 80 to 100 people globally who have the level of experience they have. Right now, for better or for worse, the capital requirements in compute and top-tier talent make [launching an AI startup] quite a capital-intensive game."
The promise of Mistral as it stands four weeks after it first emerged blinking in the daylight is another "large language model." That's it. This is the same type of technology that underpins OpenAI's ChatGPT – a neural network of tens of million to billions of parameters trained on large quantities of unlabeled text using self-supervised learning or semi-supervised learning.
That is all we know of the untold riches held in the minds of Mistral's power trio. Its website, a minimalist single-page affair, says little other than: "We're assembling a world-class team to develop the best generative AI models." It also provides an email address, asking for candidates with "a strong background as a researcher, software engineer or product developer in AI."
Mensch said: "There is a rising awareness of the fact that this technology is transformative and Europe needs to do something about it, both as a regulator, as a customer and an investor."
Tech investment tracker Dealroom.co pegged the seed round as Europe's largest, which is indicative of the hope that AI will positively transform entire industries by taking humans out of the equation – computer programs don't eat, sleep or unionize.
So while venture capitalists are feeling FOMO and paying high prices to get a foot in the door of the latest tech gold rush, Europe is also pretty desperate, with only $4 billion stuffed into AI businesses this year compared to $25 billion in the United States.
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The European Union is also legislating hard and fast to regulate AI before it too gets left behind, though Mistral's Mensch said the rules as they stand "would make it very hard to actually innovate in a field whose implications we don't really understand yet." But there is also a sense that Europe needs to depend less on other countries for tech and industry.
"We just need to demonstrate how beneficial it will be, for once, to be in control of our own destiny in terms of technology in Europe," said Jean-Charles Samuelian-Werve, chief executive of French health tech startup Alan and an adviser to Mistral.
It's a sentiment echoed by France president Emmanuel Macron, who spoke alongside Mistral AI's Mensch at a tech conference in Paris this week.
The current frenzy around artificial intelligence reminds us of the blockchain craze of 2017, when even ailing drinks companies could claim to have pivoted to the tech and see their share price soar 289 per cent.
Now you don't even need a product, or even the promise of something groundbreaking, just a handsome CV and "AI" in the company name. What we on the outside do know, however, is that at least one person on the Mistral team knows some HTML.
The Register asked Mistral AI to comment. ®