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Mistral AI Raises $487M Led by Andreessen Horowitz, Valued at $2B

In its latest fundraising round, Mistral AI, a French AI startup, aims to raise over €450 million ($487 million), led by Andreessen Horowitz. The round, including investments from Nvidia and Salesforce, values Mistral AI at approximately $2 billion. Co-founded by former scientists from Google's DeepMind and Meta, the startup specializes in open-source software for chatbots and generative AI tools, posing as a formidable rival to OpenAI.

Following a record-breaking $113 million initial funding, Mistral AI, launched in May, was valued at $259 million in June. The firm released its first generative AI model, Mistral 7B, in September, a small-sized model with 7 billion parameters, offered free to developers. CEO Arthur Mensch positioned Mistral AI as a major AI player, emphasizing their cost-effective and efficient training strategy compared to competitors like OpenAI's ChatGPT.

The investment round, with Andreessen Horowitz injecting €200 million ($216.9 million), totals over €450 million ($352 million) in equity. Mistral 7B, capable of tasks like question answering and summarization, operates at a fraction of the cost of proprietary solutions, showcasing the startup's commitment to advancing frontier AI models.

Founded by industry veterans and leveraging its founders' experience with large language models, Mistral AI's rapid rise in the European AI startup sector positions it as a leading force, emphasizing innovation, value, and competitiveness in the AI industry.