Microsoft Invests in French Startup Mistral AI to Foster AI Innovation

Technology giant Microsoft Corporation (NASDAQ: MSFT) has entered a multi-year partnership with French startup Mistral AI aimed at fostering innovation in the artificial intelligence AI industry.

According to an announcement on Monday, Microsoft will invest $2.1 billion into the 10-month-old startup to help it realize new business opportunities, drive ongoing research, and expand to global markets. The partnership also grants Mistral AI access to Microsoft Azure’s AI infrastructure.

“We are thrilled to embark on this partnership with Microsoft. With Azure’s cutting-edge AI infrastructure, we are reaching a new milestone in our expansion propelling our innovative research and practical applications to new customers everywhere,” said Mistral AI CEO Arthur Mensch. “Together, we are committed to driving impactful progress in the AI industry and delivering unparalleled value to our customers and partners globally.”

Besides access to Azure AI’s supercomputing infrastructure, another of the partnership’s three main focus areas is research and development (R&D). The two companies plan to work together to train purpose-specific AI models for select customers such as European public sector service providers.

The third area of focus is scale to market. Mistral AI’s premium large language models (LLM) will be available to customers through the Models as a Service (MaaS) in the Azure AI Studio and Azure Machine Learning model catalog. This allows the startup to promote, sell and distribute their AI models to Microsoft customers globally. It also makes Mistral AI the second company to host its LLM on the cloud platform after Microsoft-backed OpenAI.

Microsoft president Brad Smith has stated that the partnership is a sign of the US-based company’s support for European technology. Speaking to CNBC at the Mobile World Congress tech conference in Barcelona on Monday, Smith said:

“I really think this day is one of the most important days in terms of Microsoft’s technology support for Europe [..] What we’re fundamentally agreeing to a long-term partnership with Mistral AI so that they can train and deploy their next generation models for AI on our AI data centres, our infrastructure, effective immediately.”

The investment expands Microsoft’s reach in the AI industry beyond ChatGPT creator OpenAI. It also comes at a time when the tech titan faces regulatory pressure in the European Union over its estimated $13 billion investment in OpenAI.

When prompted on whether the partnership was a strategic effort to allay competition concerns, Smith countered that Microsoft was committed to offering diverse products. He added that the company’s interest was not limited to American products.

The CEO pointed out that the investment would ensure that Mistral AI had funds dedicated to R&D, including AI models for public sector services in Europe. Overall, according to Smith, Microsoft’s partnership with Mistral AI is set to be “an engine for technology, innovation and growth in Europe as well.”