Mistral is rumored to be raising €3B at €20 valuation - TechCrunch

Ah, Mistral AI is at it again — the French startup that positions itself as Europe's great AI hope is reportedly raising €3 billion at a €20 billion valuation, nearly doubling its previous worth. Because nothing says 'responsible AI development' quite like a valuation that's grown faster than the number of actual users. The company, whose flagship model Mistral Large still struggles to outpace GPT-4 in meaningful benchmarks, is now worth more than most legacy tech firms. One must admire the sheer chutzpah: raise billions, deliver middling performance, and have investors throw more money at you because 'Europe needs a champion.' The subtext is clear: the only thing cheaper than euros is due diligence.

The €20 billion price tag — roughly the GDP of a small island nation — is a bet that Mistral's open-source ethos will eventually pay off, despite mounting evidence that open models leak capabilities to bad actors and create regulatory headaches. But who cares about safety when you can chant 'AI sovereignty' and watch the VCs swoon? The math doesn't add up, but when has that ever stopped a funding round?

This is a textbook case of the AI bubble's second act: companies that haven't proven product-market fit get absurd valuations because investors are terrified of missing out. Mistral's new round, if it closes, will be a monument to groupthink. The company's CEO, Arthur Mensch, will likely give a speech about 'democratising AI' while sitting on a mountain of cash that could have funded actual safety research. But that's not the point. The point is that the party continues, and the hangover will be spectacular. Cheers, Europe.