French open source AI startup Mistral AI is speaking to investors about raising hundreds of millions of dollars in its next funding round and seeking a $5 billion valuation, The Information reported, citing a person familiar with the matter.
Mistral, which raised $415 million in its Series A funding round in December and reached a valuation of about $2 billion, has recently started generating revenue, according to the report. The startup counts Andreessen Horowitz and Lightspeed Venture Partners as investors. Mistral did not immediately respond to a request for comment.
The billions of dollars being invested in AI startups, which in turn is leading to multi-billion dollar valuations, has created skeptics warning of a tech stock bubble reminiscent of the dot-com bubble which burst in 2000. However, experts told Quartz the two bubbles are different, and fears of a bubble burst are short-sighted.
“When we had the internet bubble the first time around… that was hype. This is not hype,” JPMorgan Chase CEO Jamie Dimon told CNBC about the AI boom in February. “It’s real.”
In February, Microsoft announced a multi-year, $16.3 million partnership with Mistral focused on commercializing its flagship models and scaling up its AI development and deployment. Mistral’s large language models (LLMs) are available on Microsoft’s Azure AI platform as part of the partnership, Microsoft said, which gives the startup more opportunity to promote, sell, and distribute its models to customers around the world.
However, the partnership, which follows Microsoft’s much larger investment in U.S.-based OpenAI, is under scrutiny from the European Union as part of its larger efforts to look at the impact of agreements between “large digital market players and generative AI developers and providers” in the European market.