AI (Artificial Intelligence) letters are placed on computer motherboard in this illustration taken, June 23, 2023. REUTERS/Dado Ruvic/Illustration Acquire Licensing Rights
New York, Dec 5 (Reuters Breakingviews) – Artificial intelligence Goliaths like OpenAI continue to open the door for what might become the industry’s Davids. The much smaller and more nascent firm Mistral AI is close to inking a $2 billion valuation from investors, Bloomberg reported on Monday, despite having negligible revenue and being under a year old. With a low-cost approach and data privacy focus, it may be able to eventually carve out a solid European business. For now, though, it’s capturing cash with a slingshot.
Mistral has whiffs of what OpenAI, eyeing a mooted $86 billion valuation and eight years old, once was, but with tweaks. It was founded by ex-Alphabet (GOOGL.O) and Meta Platforms (META.O) scientists, but its models aren’t as complex and can be tailored for more specific use cases. Mistral has also focused on “open sourcing” its models, which means they can be downloaded and used for free. OpenAI, conversely, charges clients for its models and implementation. In theory, Mistral’s services should be cheaper.
As a Paris-based company, Mistral could build out its business with a specific focus on complying with AI rules being finalized by the European Union. But with no cash coming in the door, it clearly has to figure out how to make that all work. The latest infusion of capital will give it time. That, in turn, could give it the ability to work on how to capture a void left by the industry’s giant. (By Anita Ramaswamy)
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