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Source: Mistral AI raises funding at $6 billion valuation, SoftBank ‘not participating’, but DST is

Investors are feverishly continuing to evaluate artificial intelligence startups and trying to avoid simply jumping on fads, paying extra close attention to founders who have built what is often called “foundational” technology.

Paris-based Mistral AI, a startup working to open source large-scale language models – the building blocks for generating artificial intelligence services – has been raising money at a $6 billion valuation, three times its December valuation, to compete with Companies like OpenAI are competing more TechCrunch learned about Anthropic and Anthropic from multiple sources. We understand from close sources that DST, along with General Catalyst and Lightspeed Venture Partners, are looking to participate in the round.

DST, a heavyweight investor led by Yuri Milner, has been a prominent backer of some of the tech giants including Facebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba and ByteDance. DST is a new name that has never been reported before; GC and LSVP are both previous backers, whose names were also reported by the Wall Street Journal earlier today. Sources told TechCrunch that the round was expected to be around $600 million, but less than $600 million.

We can also confirm that one company that has been mentioned several times – SoftBank – is not currently involved in the deal.

“SoftBank is not under consideration,” a person close to SoftBank told TechCrunch. This also lines up with what our sources have been telling us since the round first launched in March, although not everyone seems to be on the same page: Since then, multiple reports have linked SoftBank to Mistral Invest in connection.

Sources tell us Mistral’s funding round is based on significant inbound interest and has been in the works since March or earlier, just months after Mistral closed a $415 million round at a $2 billion valuation back.

Fundraising has been the subject of much speculation since then (see here , here , and here ), but it’s an ever-moving target, with investors, round sizes, and valuations all changing. Some investors took one look and left, probably because of the price.

“We love the company and we love Arthur,” one prominent investor told me this week, referring to CEO and co-founder Arthur Mensch. “We like how fast they move, but we don’t talk.”

Mistral, unlike some other LLM builders like OpenAI and Anthropic, focuses on taking an open source approach to its work. It is one of the youngest LLM programs on the market and is also notable for its significant efforts outside Europe (sometimes referred to as the “European Champion”). Since launching its first LLM in September 2023, it has launched two more.

The significance of Mistral AI’s fundraising at a $6 billion valuation (post-money sources have confirmed) is that the valuation rose from its $5 billion target in a matter of weeks. Mistral doesn’t disclose how many users it has, nor its revenue (it offers access to its API at a range of prices, with pricing plans covering tokens for the three models released to date, as well as some custom features Mistral has built.)

All of this suggests that it’s unclear how closely investor interest aligns with current business pipeline versus promising forecasts for the future.

This shows that the market for startups and AI as a whole is very competitive – even as scaling-up private tech companies face exit challenges.

SoftBank sidesteps

it yes Indeed, SoftBank is very keen to get involved in more AI deals, even if it isn’t investing in Mistral (at least not yet). The Vision Fund turned a profit earlier this year after a strong performance, and the company is pursuing more AI activity. That includes hundreds of millions of dollars spent earlier this week to lead Wayve’s $1 billion funding round.

Sources close to Graphcore confirmed to TechCrunch that SoftBank is indeed considering acquiring the troubled British artificial intelligence chip designer, confirming other reports over the past few months.

Graphcore’s backstory is one of artificial intelligence cloud rather than a silver lining, and emblematic of some of the problems some late-stage startups are currently experiencing. The chip design company spotted the opportunity for more efficient AI chips early on and has some interesting intellectual property, which it has raised over the years from investors including Sequoia, Microsoft, Dell Technologies, as well as investors like Greg Brockman and Individuals such as Ilya Sutskov have raised hundreds of millions of dollars from OpenAI and others.

But the market it is in is completely dominated by the main manufacturer Nvidia in terms of sales volume and public opinion share. Graphcore’s last financing was valued at $2.8 billion more than three years ago, and it’s approaching the end of its runway. This has sparked a lot of speculation that it could be sold for well below that price, perhaps as low as $500 million to $600 million. However, we understand that the startup has posted better-than-expected revenue over the past few months, which both extends its runway and potentially gives it more options.

We understand from sources that SoftBank will also discuss an investment with Graphcore, so that could be an outcome as well. One investor described rumors that SoftBank was about to do a deal in some way as “extending it.”

But SoftBank does hold a special position in the chip field. It still owns a large stake in Arm, and the company has been setting up a $100 billion fund for artificial intelligence chips. It’s not just about software: the company is indeed considering partnering with British AI chip designer Graphcore.

Mistral declined to comment for this story. DST and General Catalyst have not responded to requests for comment. LightSpeed ​​declined to comment on the speculation. We will update as we learn more.

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