105 million euros: Start-up without a product receives record funding for an idea

Source photo: Techcrunch

The French AI start-up Mistral AI has received funding of 105 million euros just a few weeks after its company formation - a record for a first round of financing. What is remarkable is that the company does not yet have a finished product. Barely founded and not yet a finished product - yet the start-up receives millions. This may remind some of us of the dot-com bubble of the late 1990s.

The hype surrounding artificial intelligence (AI) now also seems to be attracting investors. This is shown not least by the example of ChatGPT, for which large sums are being invested, such as the 10 billion dollars that Microsoft has invested in the GPT developer OpenAI.

Mistral AI: AI start-up without a product receives major funding

The Paris-based start-up Mistral AI is now clearly benefiting from this AI hype. The company, which was founded just four weeks ago, was able to raise an impressive 105 million euros in its first round of financing, as co-founder and President of Mistral AI, Arthur Mensch, announced. According to a report in the Financial Times, this is a record. This record is even more impressive when you consider that Mistral AI does not yet have a finished product. The first employees are said to have joined the company just a few days before the financing round was completed.

The hype surrounding AI topics and Europe's race to catch up

The French start-up was probably not only helped by the general hype surrounding AI topics, but also by the fact that it was founded by former employees of AI companies such as Deepmind and the Facebook group Meta. Industry observers also expect Europe to invest heavily in the AI sector in order to keep up with the USA and China. Mistral AI focuses on the development of a large language model, similar to the basis of ChatGPT.

Training of AI language models associated with high costs

The training of AI models for language processing requires considerable financial resources, as reported by Golem. Experts estimate that training an advanced large-scale language model such as GPT-4 or Metas Llama can cost between five and ten million US dollars. These high costs are also one of the reasons why Mistral AI has to give investors a significant share of the company. Once the financing round is complete, Mistral AI will be valued at 240 million euros. It will be interesting to see whether Mistral AI can live up to the high expectations placed on a promising European competitor to ChatGPT. Although the company does not yet have a finished product, it has clearly gained the confidence of investors as they are willing to provide significant funding. This record funding illustrates the strong belief in the future potential of AI and shows that investors are willing to invest in promising AI start-ups, even if they are still in the development phase. It remains to be seen whether Mistral AI will be able to meet the high expectations and succeed in the AI industry.