Especially as Chinese models are getting better Mistral is getting less and less relevant.
It pains me because I want them to succeed, but despite them denying it I believe they'll end up restrict their activity to (1) selling hosting for Chinese models (they're already hosting GLM) and (2) selling AI-related consultant service (they're also doing that already).
So they’ll probably make more money creating PowerPoints with ChatGPT than they will trying to compete with the US and China.
Which would be the most European outcome ever.
Which is interesting since who are the investors and what exactly are their roles? Samsung - European? BlackRock - European? Salesforce Ventures - European? Etc.
So yes it might well be
> [...] the largest equity fundraising round ever completed by a European technology company, three years after the company's launch.
but the money isn't European.
They have been focusing largely on government and business not consumer, which is fine. Perhaps coding is not something they want to achieve, but they do provide Codestral. It's a signal it's a market of interest to them.
Also, €3B is nothing in this market, especially when you're competing with more efficient competitors. €3B in Europe is probably the same as €10B in the USA and €20B or €30B in China.
I disagree on that point. Models are getting good enough that you can switch them and barely notice. I'm switching between Opus, GPT Codex and GLM 5.3 for coding and I can barely tell the difference.
I think they'll become more like telcos than anything, selling a commodity. It's even truer when any provider can host open weight models like GLM-5.3.
Basically a world with dozens of Baseten, with AI labs having a hard time monetizing, just like editors of open source software.
Mistral does not offer a model that makes sense to use. I understand they now host the already outdated GLM 5.2, courtesy of China providing the weights. And Mistral offers this for 2x-3x the price of other providers.
This is supposed to be a success story?
> so if you don't have the most intelligent or cheapest model in the world, you're losing
So how does this match up to the fact that there is currently OpenAI and Anthropic, both raking in money? They can't both have the smartest model at the same time, can they? And all those inference companies selling API access to open weight models on OpenRouter, which are apparently also earning billions already? While the former are probably bound to have much higher cost for research and training than they are currently earning, which may be called "losing", the latter don't have that problem, they can simply price their API access such that the money earned covers their costs, no training and practically no research necessary. In your theory these companies shouldn't have a cent of earnings.
They are simultaneously first: the two leapfrog each other with regularity, and are meaningfully ahead of the competition.
There is no close second, because the AA Index points are expentially harder to get as you get closer to the first.
You'd have to be the producer of the machine producing the mask. Or, even better, the software that produces the plan according to which a machine produces a mask.
LLMs embody value systems, and American and European values are not the same (yes, there are overlaps, but also key differences).
More nefariously, I can also imagine LLMs that silently degrade their reasoning when used in a national security context of a non-US country.
So, Mistral may not be competitive with OpenAI and Anthropic, but in many contexts that doesn’t matter. And, perhaps this gap could be closed with more funding (the three billion funding figure is a rounding error next to US labs). I’m sort of surprised that the EU isn’t stepping in to support them.
It is! The second largest investor in this round is Scaleup Europe Fund:
There are also some areas where values across Europe are quite divergent. Think LGBT rights and social acceptance, religion & secularism, immigration & multiculturalism.
And countries don’t fall into neat “liberal west vs conservative east”. Spain is exceptionally liberal on LGBT issues while remaining more religious than some northern countries; Denmark is socially liberal but has adopted relatively restrictive immigration policies.
When you move here, "more religious" turns out to pretty much be window dressing. Yes, they still celebrate a bunch of the old catholic holidays, parading saints around on feast days, but apart from a handful of older folks, nobody actually believes.
Particularly when compared to the US, where a large minority is still going around loudly thumping bibles, Spain is a very secular country.
On a similar note: Why does it have to be the EU to step up?
Why doesn't EU rather speed up making VC investments more attractive, so that EU and banks don't do the majority of investing?
*I don't have answers to these questions. It just frustrates me how many investments here come from politicians and banks, rather than from investors, people, and companies.
that is being replaced with Pax Silica
Your values and American values might not be the same, but to say even most of Europe feels the same way is a big stretch. And not even the US has very many shared values anymore.
If we’re being honest, Europe doesn’t actually have much of a common value system outside of whatever is momentarily trendy in the urban monoculture, which is why it refuses to work together on most things and is currently being torn apart at the seams (see the rise of nationalist far right parties in most states).
The EU are a collection of states where the average citizen can’t even communicate with their neighbor in a common language beyond the level of a 4 year old. How could they possibly be aligned on a value system in the same way the US is.
Does the US position come with 5 weeks paid vacation? When the US position gets hit with layoffs, do you still have comprehensive healthcare and unemployment coverage?
Yes, EU software Eng salaries are a lot lower than their US equivalents, but quite a lot of folks are happy having a top 5% salary in their own county, without all the stresses and risks of working in the US.
As a concrete example, a few years back it leaked that Dan Abramov's (very decent) London salary was what his US peers earned. Didn't seem to bother the man much at all...
Thats quite competitive for a base salary, as high as max ICT5 Staff base at Apple Munich.
Yes 90k is more than most French software companies pay, but the salary needs to be competitive with those US companies.
Germany is not so great either in that sense though at least in crypto sector, the pay was reasonable... Though as a job it was total BS.
UK was pretty good at some point (though all the really good jobs were gate-kept by IR35 regulations), The Netherlands was pretty good (especially contract roles thanks to big tax discounts for foreigners). But IMO, one of the best countries outside of the US for software work has been Australia. I actually came back to Australia because of it. Though it's not quite as lucrative today but it's certainly still much better paid than France and has potential.
That said, if you want to do your own startup and you do not have special business connections or pedigree, then the US is the only real option IMO.
I think it comes down to easy money. Easy come, easy go. To be rich enough to invest in startups in France, you need to be born into old money or be a complete freak of nature. These kinds of people don't part with their money easily. They need a guaranteed return and they can't rely on any media channel to bring traffic. If you live outside of the US, all media channels are essentially working against you; you can literally feel that and so everything is riskier. It's like playing the same game with a massive handicap.
Salaries are calculated differently in France, Germany, US etc. For example working in Germany you're likely to fork a huge amount monthly to your health insurance. It actually makes it difficult to negotiate comp across borders.
$55k USD brut in France is around 2.8k EUR / month after taxes in France, which counts as the upper bracket of Middle Class in most of the country outside of Paris. Paltry when you're used to tech comps but decent for the vast majority of people here.
Mistral can't train on that data, because this data would be illegal to purchase & train on in the EU.
Culture.
In terms of output, EU working culture is inferior to American/Chinese working culture.
Work life balance is irrelevant for frontier/sovereign AI.
If you live in France, Germany, Estonia, UK, just walk outside and look at employees leaving their offices?
We need to start shaming individual countries in addition to blanket EU.
I'm not sure if your hypothesis is correct. I personally don't think the crazy work hours are what make the US so competitive in tech. But even if it were, it's odd to call for shaming countries for having less insane work cultures.
Reading this gave me a visceral disgust reaction.
I have worked in the middle of the night here to be able to ship prod fixes for meeting deadlines. But that and even overtime should be exceptions rather than the norm.
This better be bait, in which case good job but flagged anyways. Surely nobody would genuinely make the argument that workers should be worked to the bone?
What I personally think could help would be less bureaucracy and regulation in regards to tech advancements (while preserving privacy of individuals), so that the time is used more efficiently, alongside significant investments.
My US colleagues, like German one,just bullshit on reality of what they produce.
Real problem is more on VC, autonomy and small companies.
Way to reduce a multi dimensional concept into a single scalar value. Care to explain what exactly make it inferior? Try using more than one word if you can.
I think the most of the money would go to purchase hardware, But I hope they can start making adequate compensation for AI engineers and researchers to move forward.
> Being one year behind is a skill issue
E.g. if you are an AI researcher in Europe you can just go to USA and make generational wealth. This is not a criticism of the EU model, but rather insane American capex effectively monopolizing.
> I think the most of the money would go to purchase hardware,
So it's not a skill issue?
> So it's not a skill issue?
I meant by offering sovereign cloud/inference, not for training. But even if it was for training, Chinese labs have limited supply of GPUs, look what they've done. So it is a skill issue.
Also to clarify, I didn't mean European engineers' skills, I meant "you get what you pay for" as a company, that's why I hope they start offering better compensation to retain talent.
An important factor is that fine tuning existing open models is incredible cheap. You can easily change any cultural biases if you want a model to be 'sovereign'. And Mistral could combine that with their custom data sets for their enterprise customer needs. Mistral still trains their own models, but they also seem to offer fine tuning existing models.
With model weights being commoditized, another differentiator could be deploying efficient inference chips, especially if you combine it with a developer ecosystem for vendor lock-in. That is why it is interesting that both Samsung and ASML are investors, since they are companies that could make a difference in this area.
It may make sense to train a frontier model on an existing architecture if the base model is not available and the instruction trained version doesn't fit with what you want. There are techniques like ablation, but those could have other effects on the model, and there can still be lingering effects of the instruction training in the model that surface less frequently (e.g. on an input not covered by the ablation training).
Otherwise, fine tuning is definitely the way to go. However, you need to be careful not to over-tune the model such that it is only tuned to the data you are training it on.
I don't trust anything the antichrist invests in
Mistral had open-weights SOTA when Chinese labs had no noteworthy LLMs at all, and now even its closed-weights offerings are behind half a hundred Chinese models -- most of them from labs with way less funding -- despite having had unhindered access to Nvidia hardware all this time.
I know AI has more regulations here in the EU, but what I don't see clearly explained is what impact that has on pure research: creating new comparable models. So I'm suspicious that it's really impactful. On market deployment, maybe - that's where regulations lie. On internal company research?
But the US and China are incredibly lenient on enforcing even existing laws against their AI companies. In the US the standard seems to be "no instructions to make bombs or drugs, and the ability to make porn of living people has to be restricted to paid users". Laws around cyber security and copyright that used to be heavily enforced are seemingly suspended for AI companies, or settled out of court. No company that tries to actually follow the law can compete with that
Multiple US labs were taken to court over copyright infringment for their training data. Mistral did the same data mining, but actually the copyright situation is weaker here so it's harder to build a case against them.
I think the capital situation in EU is just worse. A lot of is tied up in more conservative businesses that are reluctant to bet the house on some shiny new thing.
I miss when "reality is stranger than fiction" was a cool phrase because it didn't happen all the time.
Here's a nice summary. Haven't read the book yet though it's on my list.
a16z is Humpty Dumpty and Temu Lex Luthor.
The antichrist is Greta Thunberg.
How exactly does she threaten the continued thriving of our civilization?
It is fine for people to disagree with her worldviews, but labeling her a threat to civilization is an absurd claim.
A civilization that can be threatened by a single person's acts of peaceful protest might be doing something, but it sure isn't thriving.
Thiel called one of his companies Palantir which is weird too.
But, I guess some very religious people did not got all the subtleties of "Thou shall not kill" yet, do, let's give everyone another 2000 years to process the idea.
(Also, maybe it's hard for a camel, but easier in ocaml ? I'll have to try marketing "Static typing as a way to reach heaven")
He also expelled demons from a man and conceded to their request to be installed in 2,000 pigs. That led to them drowning, causing substantial destruction of somebody else’s property for no obvious practical necessity. The local people become frightened and ask Jesus to leave their region.
Taxation is not just about paying for the costs of the country, it is also about making sure that nobody has enough power to subjugate the will of the people. Monopolies, billionaires, the accumulation of such power is making the average citizen powerless. And you can feel it.
Taxation will not solve this before the global society collapses so the question is whether we figure out a way to level the power.
This is not evil, but a trait of human nature of corruption or addiction to power.
Taxation can and must solve it before "society collapses". And many people are working to solve the problem. It is difficult and requires effort but nothing that has not been done before. We got rid of king (by the will of god) in the past so techno-power-hungry cringey businessmen should be easier.
In the EU it seems we are very much at risk of being cut off from frontier AI if the US government should decide to do so.
Is that not self evident by the insane revenue from frontier labs?
The only reason OpenAI and Anthropic are making a loss is due to training new models to keep up with competition - not because the industry is flawed in terms of business model.
Always sell shovels in a gold rush I guess
No...? Of course not?
Because revenue is only one side of the equation. Did you ever look at total cumulative OPEX and CAPEX, and how long it will take them to even just break even at current growth?
They're likely over $80b ARR by now. They'll be at $800b ARR next year at the same rate. Let's say their growth gets cut down to 3x instead of 10x - that's still $240b ARR by this time next year.
When you are growing so fast, you don't need to make a net profit. You just need to make sure your unit economics are good - which it seems like they are given reports that their gross margins are at 60-70%.
And they will be 800 trilion ARR in a couple of years, following that same rate! 8 quadrillion by 2029!
> When you are growing so fast, you don't need to make a net profit. You just need to make sure your unit economics are good - which it seems like they are given reports that their gross margins are at 60-70%.
If their margins were anywhere near this good, they wouldn't need to raise so much money so often.
If you create a machine that turns 1 dollar into 3 dollars, you don't dillute your ownership of the machine, you use your fabulous profits to expand your machine's capabilities.
Perhaps Mistral has too high moral standards to keep up?
They would if they could, which means they can‘t, even though they want to.
Seriously "thought to be" is such a baseless statement. Thought to be by whom? And on what basis?
The bubble is going to burst soon.
Not even a phone call :(
Anyway, the interview process was so janky it decreased my confidence in their success.
Not easy as it sounds yes, but it is better than throwing your CV into the ATS void 1000 times (the wrong way to apply for a job btw)
Mistral have no moat as it seems except some 'regulatory' moat.
The moat doesn't seem to exist. Probably safer to stay out of the race for now.
That paper released by a lone Google employee 3 years ago still misguiding people it seems.
We're also seeing behemoths like Google and Meta both fail to keep up with OpenAI and Anthropic. Microsoft has given up on SOTA training. Loads of once promising LLM training companies are no longer relevant at the SOTA stage such as Cohere, Mistral.
I've said this countless times but SOTA LLM market looks like a classic monopoly/duopoly market over time. Each generation requires magnitudes more resources to train and you can only compete if you've made enough money on your previous generation.
The two companies have read the market the same.
It's always very dangerous for first movers and their investors, and the commodification of intelligence seems even more likely each time a chinese open model release. It's less exciting to do business that way, but if you're building to stand the test of time, it's wiser that way.
Apple's strategy seems to be "wait till real business shakes out" but Mistral's strategy seems to be "go after profitable niches and avoid unwinnable fights".
I think what Mistral is doing is smart within their financial constraints, but this comparison is misleading. Mistral is an LLM company; Apple is a consumer hardware and services company.
It's smart for Apple not to join the LLM arms race, because they can just pick the cheapest supplier and let other companies take the financial losses. Mistral is in a very different situation; they are the supplier.
It's hard for a US company to be sovereign to the EU and the same with China ;).
Given current geopolitics there are going to be a lot of quiet conversations in government offices across Europe about how much we want to rely on the Americans/Chinese for anything and how we reduce that exposure to either.
Yes we have and will have the entrenched problem to deal with but adding to that problem is the issue at this point.
Mistral is not Apple, and is not emulating their strategy. Please show me Mistral’s half a $Trillion in yearly revenue coming from consumer hardware/software.
Then I’ll agree with you that they’re taking the Apple strategy.
Apple is a $4.7 trillion company selling computers and iPhones. How many computers and iPhones is Mistral selling?
In your comparison Apple is Apple while Mistral is orange.
First of all, they release the models' weights, perdonally I don't consider any other option as viable (no OpenAI and definitely no Anthropic, thank you).
I especially like their Vibe Chat web offer, the allowed monthly usage with a free account is incredibly generous (still have to hit a limit) and the deep research feature (5/month for free) is also valuable.
I don't know anything about the alleged regulation maxxing problems, I don't perceive them as a problem for my causal/personal usage anyway.
The gap has only been increasing, though. Devstral 2 was obviously not great compared to Claude/GPT but kind of acceptable if you were willing to compromise. There has been no real progress since then and frontier labs are massively ahead.
But I do care about capability and so far only Anthropic and, very recently with Astra, OpenAI can deliver on coding quality. And capability matters immensely. There is a world of difference between being able to do something and not being able.
AFAIK: Mistral does not even try to compete in this field. There are other use cases for LLMs beside coding. As Mistral AI wrote:
> During the first wave of generative AI, the central question was who could build the most powerful model. Organizations and governments are now asking a different one: how to harness the power of AI for their mission-critical needs without surrendering control over the infrastructure and intelligence loop. Demand for that combination of performance with control, choice and independence is growing internationally, as enterprises and governments weigh the long-term technology dependencies, data governance requirements and deployment choices that come with any AI investment.
> Mistral is the only AI company in the world building the full stack required to answer that question: open-weight models, the infrastructure and the compute capacity they run on, and the products that bring them into production; ensuring that customers are never locked into a single vendor's roadmap, pricing or availability.
> Mistral’s full-stack and open approach also allows organizations to build on it without exposing their most valuable data, workflows and institutional knowledge to anyone outside their own walls. That's what makes Mistral’s stack the sovereign AI layer, meaning retaining control across four dimensions: data that stays inside the organization's boundaries, models that are controllable and customizable, compute that is private and predictable, and systems in production that are fully controllable and auditable.
They have released models speficially for programming that ”vibe coding” would be safer.
https://mistral.ai/news/leanstral/
It's definitely a lot slower, though
There are things GPT 6.0 can accomplish for me that 5.3 was not able to. But there are also things it still fails at, and it doesn't seem to be much better at the big picture. It does spam about 100x more tests though and I wonder if just RLHFing it to test everything constantly is carrying it more. 6.0 writes so many tests and spends so much time verifying it's work in python sandboxes. Slow as hell but it tends to get things right the first time more which is good, I guess. I don't love the thought of a 500loc feature adding +4000loc due to tests though.
Even those old llama models were ok for coding
Yes yes they won't be like Claude's fire and forget (until you see how many tokens you burned to write "Hello World")
You must care about good benchmarks (identify those that have relevance).
We've been migrating all of our AI automations from Gemini to Mistral because of the fear of data transfer regulations. Maybe they don't apply to us (we don't really feed personal data to AI), but we can't afford to find out.
It's been quite annoying too because the Mistral documentation and dashboards are all over the place.
Fear of fines... that's not what I would call "the right reasons".
My American bank sold my credit card transactions to advertisers. My American mobile operator had insane fees for roaming and other features that are basic in Europe. Sending a bank transfer in America was unreliable and slow and expensive because there was nothing like SEPA instant 24/7 free transfer (I guess FedWire does that nowadays, I don’t know if consumers actually have guaranteed access at all banks like they do in EU).
When American AI companies become established Fortune 100 members, they’ll start abusing their customers just like all the others in that club, those banks and phone operators and Microsoft and the rest. Google once pretended to be different, now they have the corporate cancer. No reason to believe the same won’t happen to OpenAI and Anthropic.
Even a lot of their attempts to increase competitiveness like forcing Apple to allow alternative app stores have been halfassed and not very effective.
Edit: forgot, they also call for banning Chinese models and open weights models...
Markets, left to their own devices, do not end up automatically being competitive in favor of consumers.
But above all, if AI wasn’t hyped as a threat to humanity, to jobs, to security, regulation could have been cautious.
To add insult to injury, given how voters are tired of technology, expecting a different move from governments is a losing bet.
True. Does not mean all regulation is increases competition and marker efficiency by default. If anything EU has long abandoned the core tenets of Ordoliberalism and "Social Market Economy"
I heard there used to be dozens of plane-building companies when the field was unregulated, with new, more efficient models and lower prices appearing regularly. I wonder what happened.
I heard that this is nonsense. There never were more than a handful of large aircraft builders (still are plenty of small ones), safety records certainly weren't better in the era before consolidation, and new entrants funded by the might of their governments have failed not because of regulation but because what airlines actually want is lots of identical aircraft from a reliable supplier and the new entrants haven't really been competitive in terms of performance either. The certification is complex, but so's building an aircraft, and it's really only the people further down the supply chain that need the protective umbrella...
I kept hearing the same about previous age tech and there also Americans rule the Internet: Google Search, Workspace or m365, AWS, Cloudflare... Even Linus moved to the US.
Consumer rights - 14 day cooling off period for online purchases
Sale of goods - 2 year seller liability for defective goods
Right to repair - likely doesn’t need explanation, require manufacturers to offer repairs and replacement parts
Unfair commercial practices - prevent misleading or deceptive advertising
Unfair contract terms directive - prevents disproportionately one-sided provisions in T&Cs (think Disney giving themselves legal immunity for a free Disney+ trial)
The EU’s problem seems to be in communicating its benefits to its citizens.
We somehow need to "want" a slower news cycle and simultaneously push back against the algorithmic outrage. The world is more predictable and safer than ever but the perception of the average person is not this, it's manufactured outrage at every possible opportunity and topic.
Despite the average european objectively being better off and safer than a decade ago, almost none feel that way and that is almost 100% due to the news algorithms being tuned to keep you in a constant dread cycle.
Let's not forget I am paying directly for those when I buy a product. Those benefits are not free, they cost money. The money has to come from somewhere. It can't come from profits (since those are the sacred reason the company exists in the first place) thus they will come from higher prices.
Higher product prices mean less competitive companies. It also means fewer startups which must implement the required regulation no matter the market says. Then you need protectionism against Chinese competition.
But the worst is that I must pay for those benefits whether if I want them or not. Thus my choice is reduced. I cannot vote with my wallet and send price signals in the market to tell sellers that I want those benefits or not and at what price. The market gets corrupted. The economy falters. Outside competitors gain. The Government needs to intervene again and again, growing stronger and more intrusive "for my own benefit".
It's the decay spiral we are witnessing here in the EU right now.
As part of the AI Act, an important decision on a person (such as a hiring decision) cannot be made without human involvement.
You think that's not in favor of "consumers"? (also note the implicitly submissive framing of humans as receptacles for consumption instead of subjects with rights!)
which is a market Chinese labs won't get into.
they only other company they compete with is probably palantir in that regard.
So not only outpriced, outperformed, but also outregulated.
Idk i wish there was some bright light in the future, but i dont see it
We need a lot more hardware for universal LLMs (probably 10x, if not more), and we need it to be cheaper.
If anything, I would fund a DRAM maker in Europe.
I wouldn't. I can think of at least 10 regulations (labor and environmental chef amongst them) that would render such a maker uncompetitive from the start. Chinese makers would eat its lunch.
And with half the score of the top models, that's where Mistral is at.
As it is now, no tech company in the EU will use it, if they were just 80% from the top, that would be more feasible.
I’m surprised that there’s no domestic chip production either, we don’t have our own CPUs or GPUs, meanwhile China is spinning up manufacturing so they don’t have to work around the Nvidia export restrictions as much.
I like Mistral and there’s cool stuff going on like how EuroLLM models know Latvian language and all the other EU ones better than way bigger models, but we don’t have anything frontier.
At the very least, they should be distilling Kimi K3 and GLM 5.3 as much as possible and working on MoE models like ~35B and ~120B versions to match Qwen.
The CCP is able to plan the economy. We used to be able to do that in the 60s-70s, at least in France, but that mindset is long gone.
EU needs to meet their own demand, the US wants to be the global provider.
The second one is about which model to run and who controls and oversees quality control. OpenAI and Anthropic seem to insist that only they can do that. But of course here in the EU we see that a bit differently. The big US based hyper-scalers are neither liked nor trusted here at this point. We don't trust the Chinese model makers much either. But with open weight models, we can at least pick different models and run them on our own terms.
Also, what most companies need is not necessarily the latest fashionable model straight from the Silicon Valley cat walk but something that will work reliably and predictably for years. Factories are not going to install the latest model in their production lines every few weeks. Same with most banks, insurers, etc. I actually know people that do business with those in relation to AI development in Germany. Companies like that are very much obsessing about self hosting their models. Sending customer data off premises is a big concern for them. They are building stuff that will be used for many years. In five years, nobody will care which model was best in autumn of 2026. But a lot of software built this year that uses AI might still be running.
You have to see Mistral's investment in that context. They could make a lot of money in the EU if they do a decent enough job. Lots of conservative companies here that are going to pick something that's good enough and then they'll be using that for many years.
Every newly released model is paraded as SOTA showing peak or near peak performance on cherry-picked bendmarks the model was either fine-tuned on, or tested under specific conditions optimal for that model.
You crazy to think that Fable and Astra capabilities is fake
Whether AI is hosted by the USA, Europe or China - they all are awful and eliminating real jobs while also driving up RAM prices etc... Why should I want to support any of these?
Where in the fuck did we stall out?