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France’s Mistral AI raises a $113M seed round to take on OpenAI
- theknocker 3y ago[dead]
- nbevans 3y agoI'm not sure that $113M is enough? They will also need to find a Tier 1 cloud partner but Azure and GCM are both taken.
- pelorat 3y agoIndeed. With all the costs we need to deal with here in Europe when running a company, there's zero chance anyone can afford to roll their own hardware for this without cash from the USA and that's not going to happen. This company is dead before it got started. With the AI Act looming over it in the future even more so. But maybe they will survive, by going to the USA.
- naiv 3y agoMaybe they will team up with OVH
- kramerger 3y agoWhat is this hostility towards non-US companies I see on HN?? EU has a lot of small-medium companies in both AI and cloud and they are doing just fine. If anything, they are better at adapting to regulations compared to, say, openAI... https://www.bbc.com/news/technology-65708114 https://www.bbc.com/news/technology-65708114
- dopamean 3y ago> It’s very early to talk about what Mistral is doing or will be doing — it’s only around a month old — but from what Mensch said, the plan is to build models using only publicly available data to avoid legal issues that some others have faced over training data, he said; users will be able to contribute their own datasets, too. Models and data sets will be open-sourced, as well. Unless I missed it elsewhere in the article this part really glosses over something I have a hard time understanding. 113M seed round at a 240M valuation for a company that has no product yet and a plan to build something like something else that already exists. This feels insane to me.
- constantcrying 3y ago>This feels insane to me. Maybe. But there seems to be a reasonable investment case. Especially if the EU is making stupid laws, being the "European AI" company seems quite valuable.
- mach1ne 3y agoMaybe there’s enough money in Europe that investors who were anxious to join the AI train jumped the gun. Indeed the whole thing is sketchy.
- papruapap 3y agoSpeech 100, at least the ceo have job security. Jokes aside, I wonder why people think that public available means copyleft.
- Nasrudith 3y agoTo be frank my first instinct is "slush fund" from the start just because they are appealing to nationalism first. Starting off with a thought terminator is a mark of a deceiver. Edit: I mean would you expect anything less than a slushfund or grift from an "America AI" project?
- elcomet 3y agoThey're investing in the team, which I think is smarter than investing in an idea. Those people built llama at meta and flamingo/chinchilla at deepmind.
- Ecstatify 3y agoVaporware.
- rvz 3y agoI guarantee that AI will have it's own best fraudulent company like the rest of the other startups in each of their industry sectors: Theranos (for Healthcare), WeWork (in general), FTX (for crypto) and Nikola (for electric vehicles). All thanks to the continued unjustified and extreme seed funding rounds and over-valued companies like this especially with no product or any proof other than 'the team'.
- Multiplayer 3y agoFan of wework here. As a longtime happy customer I do not believe they belong in a list of fraudulent companies. They still enable me to walk into any major city and have a nice office to work out of and I appreciate them for that. They changed the real estate game for startups and solopreneurs and should be commended for this!
- nradov 3y agoRight, there was no "fraud" at WeWork in the legal sense. All of the pillaging of investor capital was properly disclosed and didn't break any laws.
- johntiger1 3y agoThey bet big and they were wrong. It happens
- Sai_ 3y agoYeah, the wework hate is getting a bit out of hand. They (well, co-working spaces) added uniformity, predictability, and an international footprint to a legacy business of renting office space.
- stnmtn 3y agoThe Mistral is a northernwesterly wind that blows from France into the Mediterranean. Cool name for an AI startup.
- George83728 3y agoKind of a strange name, but I like it.
- bombcar 3y agoI read it as Mistrial three times before I figured it out.
- ClumsyPilot 3y agoIt is also an Amphinious assault ship that Russia tried to buy from france. https://en.m.wikipedia.org/wiki/Mistral-class_amphibious_assault_ship https://en.m.wikipedia.org/wiki/Mistral-class_amphibious_ass...
- simonebrunozzi 3y agoNamed after the aforementioned wind.
- nradov 3y agoAlso the name of a French anti-aircraft guided missile. Boom! https://www.mbda-systems.com/product/mistral-manpads/ https://www.mbda-systems.com/product/mistral-manpads/
- kreig 3y agoGood to know, I initially tought that name was for the Nobel laurate writer Gabriela Mistral.
- euroclear 3y agoI knew this only because Nietzsche wrote a poem about it. https://de.wikisource.org/wiki/An_den_Mistral https://de.wikisource.org/wiki/An_den_Mistral
- zn44 3y agogiving up ~30%/40% of the shares in the seed round. That's something you can regret
- justrealist 3y agoI mean sure... but they now each have ~$30mm in (nominal) equity having done 0 work. That's not a bad deal.
- qeternity 3y agoLiq prefs are a bitch…
- dopamean 3y agoI imagine that's the only way to get someone to commit 100M+ in a seed round though.
- hospitalJail 3y agoI'm about to do similar... Its that, or I DIY my product. Either sounds fine to be honest.
- shmatt 3y agoby the time any average series E IPOs, they're all diluted like crazy anyways
- rapsey 3y agoIf investors are going to act this way we're gonna have a dotcom level bubble.
- toomuchtodo 3y agoTremendous. Tech salaries and exuberant valuations are back on the menu y'all.
- synaesthesisx 3y agoA friend of mine just got a 7-digit offer at an AI company, so yes, we are so back
- Filligree 3y agoOh, definitely, but keep in mind that a lot of huge companies came out of the dotcom bubble. There was a lot of nonsense, but quite a few well-planned products as well, some of which even succeeded. I think AI's going to be the same way, at least at first. Long-term there's of course a possibility of takeoff, slow or fast; I don't think we've excluded that yet.
- hospitalJail 3y agoI'm ready for this. Being ahead of the game has made me some money already. When Bard made a mistake, google stock dropped 10%. I bought knowing that LLMs make mistakes. So I made $200.
- B1FF_PSUVM 3y ago> I made $200. You filthy \w slighty soiled speculator. Another six orders of magnitude, and you'll be worse than Soros.
- BSEdlMMldESB 3y agothat's how american economics work from bubble to bubble. the crypto is bust, now it's time for AI to get swelling.... eventually it will pop too
- espadrine 3y agoIf I am not mistaken, their CTO and CSO had a significant impact on this year’s open-source LLM efforts, as they are some of the LLaMA authors.
- svantana 3y agoThey are indeed, and to drive this point home (subliminally?), one of them is wearing a t-shirt with a llama on it in the press image.
- deleted 3y ago[deleted]
- Nifty3929 3y agoWhat I didn't read was a business plan. How do they plan to capture a fraction of the value they create, and pass a fraction of that fraction on to investors?
- hef19898 3y agoThrough an IPO. Unless you talk about non-shareholder value, but cares about that nowadays?
- johngladtj 3y agoYou seem confused as to what shareholders are
- dpflan 3y ago$113M seed at $260M valuation -- a seed round that values the company at ~2x, is that conservative or expected?
- tromp 3y agoI think it just means that the investors will hold 113/260 ~43% of the shares, with the founders controlling the other 57%.
- pauldix 3y agoLikely the 3 founders have 12% each (after a 4 year vest) and the remainder (21%) goes to the option pool.
- blitzar 3y ago113M for ~50% of zero product and a vauge plan. Seems fair enough to me, if they had a barely trained prototype it probably would have been 113M for 15%.
- reducesuffering 3y agoSeed rounds are usually 10% - 20%, I haven't heard of 43%.
- questime 3y agoThese are considered "incubated" companies - I don't think these usually go well. Common in biotech though.
- TechBro8615 3y agoPerhaps there is more cultural willingness to surrender 50% of a company when you live in France and are already used to sending 50% of your income to the government. But even as an American, I think I could be convinced to give up 50% of my newly formed company for $113 million of runway...
- treprinum 3y ago
- karimtr 3y agoThis looks very similar to this: https://techcrunch.com/2019/09/13/element-ai-raises-151m-on-a-600-700m-valuation-to-help-companies-build-and-run-ai-solutions/ https://techcrunch.com/2019/09/13/element-ai-raises-151m-on-...
- frankbinette 3y agoSold for 230 millions to ServiceNow, still a huge blow to Montreal's AI scene.
- rad_gruchalski 3y agoWell, good luck in the face of the new EU AI directive. They’re going to need the money to feed those bureaucrats.
- boringg 3y agoPeople, the AI hype is all the money from crypto finding a new home.
- DebtDeflation 3y agoGood. I'd rather it be spent on something that is at least creating some value than on literal ponzis and scams.
- boringg 3y agoThere some strong assumptions under there. Both promised the future.
- ClumsyPilot 3y agoQuestionable. I would rather have 200k Etherium than the same in OpenAI.
- olivermarks 3y agoI read this by Dana Blankenhorn this morning which I think a few people in France need to read. This AI Boom Will Bust | The Slope of Enlightenment is Coming https://danafblankenhorn.substack.com/p/this-ai-boom-will-bust https://danafblankenhorn.substack.com/p/this-ai-boom-will-bu... 'In the end today’s AI boom is an evolution. It evolves from the huge databases built by the Cloud Czars, from the technology used to search those data stores, and from the ability of Graphics Processing Units to turn out results quickly.' The French like to go in early in tech, minitel is a good example, but they almost invariably get leapfrogged by subsequent waves. https://en.wikipedia.org/wiki/Minitel https://en.wikipedia.org/wiki/Minitel In the AI era who owns the data and data sanctity is an upcoming legal quagmire that the big players will win. I don't see France ever being a big player in this world.
- Leo_Germond 3y agoThe French atomic bomb, nuclear plants, high speed trains, and planes are not getting leapfrogged though ;)
- olivermarks 3y agoFrench innovation is quirky but brilliant IMO - minitel was years ahead pre internet. For some reason French innovation doesn't spread much beyond France. Concorde (I love that plane so much) was an Anglo French project. A lot of my friends parents in the UK midlands were involved with at massive project, but it never scaled to fleets and eventually withered away after an astonishing amount was spent developing it in the '60s ($2.8 billion in that era's valuations). Not denegrating French innovation here at all, I just don't think the rigid ENA/Ecole Polytechnique elites are practical or competent in understanding how to exploit and build on great ideas by their countrymen.
- artwr 3y ago> Not denegrating French innovation here at all, I just don't think the rigid ENA/Ecole Polytechnique elites are practical or competent in understanding how to exploit and build on great ideas by their countrymen. I don't disagree that these schools still need to evolve a bit, but you'd be surprised at how much they've already moved in that area. I know multiple people from Polytechnique are heavily involved in entrepreneurship and/or AI.
- klft 3y agoThis is good news for Nvidia.
- nradov 3y agoThis reminds me of Quaero and later Qwant. Both were French attempts to create national champion companies to compete with Google and establish digital sovereignty. Quaero totally failed. Qwant is still hanging on but nearly dead.
- RcouF1uZ4gsC 3y agoUnless they are devoting that $113M to making and releasing open source models a consumer can run, which seems unlikely, I see no way they can succeed in building a better proprietary AI. Google is already feeling the threat to their $100 Billion/year business and is willing to throw massive amounts of money at AI. OpenAI isn’t so much a startup but should be seen as Microsoft’s strategic vision and as such has all the Microsoft resources to push it forward. Microsoft has poured billions into Bing for years in vain hoping to cut into Google’s search dominance. Now comes the chance to use AI to outcompete Google and they will pour their resources into it. With neural networks, massive amounts of data tend to overwhelm any secret sauce. Google and Microsoft have access to massive amounts of data as well as the hardware required to process these massive amounts of data to train neural networks I see this as mostly a way for a European company to ride the hype wave of AI, combine that with European paranoia and envy with regards to the US and make a lot of their investors rich.
- bsaul 3y agoI'm usually the first guy to critise french investment strategy in overhyped fields.. However, in this case we have : - really smart people, that really graduated from the very best french schools - that actually have real world experience in the top research facilities in the field, in the US. - that know each others very well - and don't rely solely on public funding (so they will definitely be held accountable for what they're doing with the money). This is waaaaaayyyyy above what we're used to. So, i have to say : congrats to the team, and godspeed !
- cowpig 3y ago> that really graduated from the very best french schools I find it shocking when people refer to what school someone went to as a credential in just about any context. I usually consider it a red flag, an indication that there is no functional understanding being applied in the evaluation
- constantcrying 3y agoIt is usually also a social indicator that you have specific friends. It only means something if the school holds you to specifically high standards, which of course varies drastically.
- bsaul 3y agonot any context... the school they went to is specifically selecting math wiz.. Which seems a bit related to the field of ML (but please correct me if i'm wrong).
- andromaton 3y agoBtw, Mistral is the name of a strong wind from France into the Mediterranean sea.
- satvikpendem 3y agoEdit, fake news, clarification here: https://www.linkedin.com/feed/update/urn:li:activity:7066108711152283648/ https://www.linkedin.com/feed/update/urn:li:activity:7066108... --- Didn't the EU just pass an AI law that prohibits generative AI? > In a bold stroke, the EU’s amended AI Act would ban American companies such as OpenAI, Amazon, Google, and IBM from providing API access to generative AI models. The amended act, voted out of committee on Thursday, would sanction American open-source developers and software distributors, such as GitHub, if unlicensed generative models became available in Europe. While the act includes open source exceptions for traditional machine learning models, it expressly forbids safe-harbor provisions for open source generative systems. https://news.ycombinator.com/item?id=36324481 https://news.ycombinator.com/item?id=36324481
- fulafel 3y agoNo, they didn't. There's an early ish phase in drafting legislation: https://www.europarl.europa.eu/news/en/press-room/20230609IPR96212/meps-ready-to-negotiate-first-ever-rules-for-safe-and-transparent-ai https://www.europarl.europa.eu/news/en/press-room/20230609IP... The NYT article behind your HN link doesn't seem to contain the quoted claim (maybe it was revised?).
- satvikpendem 3y agoAh you're right, seems I succumbed to some fake news unfortunately. I just read the LinkedIn clarifying post: https://www.linkedin.com/feed/update/urn:li:activity:7066108711152283648/ https://www.linkedin.com/feed/update/urn:li:activity:7066108...
- treprinum 3y agoIt feels like a typical "young & hyped" European business - fanfare in the beginning, capital from old money networks that want to stay relevant, then fizzling out slowly without showing anything worthwhile later.
- namaria 3y agoI've worked at a couple of mid level undertakings of the kind. Smart people do it on the down low and milk it for years. The inner circle draws fat engineering salaries, and they keep surfing on the latest tech hype wave.
- peanuty1 3y agoReminds me of Montreal's Element AI.
- konschubert 3y agobingo - but I hope I am wrong.
- xor99 3y agoexactly
- hef19898 3y agoAt least those don't leave craters of the size of FTX, WeWork or Theranos. Stupid Europeans, even fail at failing!
- bitcurious 3y agoCredit Suisse, Wirecard, WV emissions scandal? I don’t think corporate fraud/failure is unique to US.
- hef19898 3y agoWe talked about young, start-up like companies. Heck, Wirecard was decades old before the scandal broke. Regarding European scandals, I'd throw in Siemens' corruption scandal, Contergan and every other one I forgot...
- tin7in 3y agoI just listened to one of the team members next to Macron at a conference in Paris and I sense that French politicians really want to make this work - for protectionist reasons or just to bring back French R&D in the game. With that in mind though it's interesting to see that 40% of it is already owned by foreign capital.
- atleastoptimal 3y agoAhhhh the French, tech grift, has always been celebrated for its excellence. There is a California tech grift, by Marcus Andreessen, inspired by that same French excellence. It's built on generative AI and like the best French tech grift, it's highly speculative.
- deleted 3y ago[deleted]
- noraft 3y agoA $113m seed round is unprecedented. This just goes to show that if you're super well-connected, all the doors open up for you.