The artificial intelligence hype is showing no signs of fading and investors are almost falling over themselves to fund the next big thing in AI. Yesterday, Paris-based startup Mistral AI announced that it had raised 105 million euros Reportedly Europe’s largest seed round ever.

Mistral AI was only founded four weeks ago by three AI researchers. Arthur Mensch, the company’s CEO, was formerly employed by Google’s DeepMind. His co-founders, Timothée Lacroix (CTO) and Guillaume Lample (Chief Science Officer), previously worked for Meta.

The company has yet to develop its first product. However, on a mission to “make AI useful”, it plans to launch a large language model (LLM) in early 2024, similar to the system behind OpenAI’s ChatGPT.

A large part of the money raised will be used to rent computer power to train it. The idea is to use only publicly available data to avoid legal issues and copyright backlash that others in the industry face.

While Mistral hopes to tackle OpenAI with true open-source models and datasets, it sets itself apart from the Microsoft-backed initiator of incremental change by focusing on enterprises rather than consumers. Company say the goal is to help business customers improve processes around R&D, customer service and marketing, and give them the tools to build new products with AI.

Vision coupled with hands-on experience

The funding round is led by Lightspeed Venture Partners. The partner of the VC, Antoine Moyroud, says that Lightspeed has had the opportunity to meet several talented researchers who have become founders of AI, but few of them had a vision outside of the tech field.

Mensch, Lacroix and Lample, on the other hand, according to Moyroud, “are part of a select group worldwide who have both the technical knowledge needed to develop their own vision and the hands-on experience of training and operating large language models at scale.”

Overall, the US VC says it believes Europe has “a decisive role” to play in AI. Only in September last year, the company opened new offices in London, Berlin and Paris, and says it is looking to collaborate with more European founders with the same ambition behind Mistral.

“Our investment in Mistral, and all of our portfolio companies in Europe, is testament to our firm belief that a new generation of global players will emerge from this ecosystem,” Lightspeed said in a statement.

JCDecaux Holding, Motier Ventures, La Famiglia, Headline, Exor Ventures, Sofina, First Minute Capital and LocalGlobe also participated in the round, along with private investors including French billionaires Rodolphe Saadé and Xavier Niel, as well as former Google CEO Eric Schmidt and French investment bank BpiFrance.