France’s OpenAI Challenger In Line For $1B Boost From UAE To Close AI Gap With US, China: Report

Mistral AI, Europe's largest artificial intelligence startup and a competitor to OpenAI, is in talks to raise $1 billion in equity from investors, including Abu Dhabi fund MGX, according to a Bloomberg News report.

Based on inputs from individuals familiar with the matter, the report also stated that the French AI firm is negotiating to secure hundreds of millions of euros in debt from French lenders, including its existing investor, Bpifrance SACA. That is separate from the equity financing.

Mistral has raised approximately $1.2 billion in funding to date since its founding in 2023, and its latest reported valuation exceeds $6 billion. While much smaller than OpenAI, Mistral is viewed as a key player in AI outside of the U.S. and China, the two dominant leaders in the AI race. It also plays a crucial role in French President Emmanuel Macron's vision for AI sovereignty.

On Stocktwits, the retail sentiment for OPENAI shifted to 'bearish' from 'neutral’ as the Sam Altman-led company also grapples with losing top talent to Mark Zuckerberg’s Meta Platforms.

The Mistral deal talks are at an early stage, according to the report. If they fructify, it will give Mistral resources to compete more effectively with larger competitors and deepen ties between France and the United Arab Emirates.

MGX is an investor in OpenAI and xAI and a part of OpenAI's Stargate project.

Meanwhile, Mistral, MGX, and Nvidia (NVDA) have partnered to build Europe's largest AI data center campus near Paris.

Mistral AI co-founder and CEO Arthur Mensch had stated that his company would invest several billion euros in computing infrastructure, including the facility near Paris. 

In June, Nvidia announced its support for the creation of an AI cloud platform in France called Mistral Compute, which will utilize 18,000 of its latest Grace Blackwell chips.

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