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See the pitch memo that raised €105M for four-week-old startup Mistral
- bb_muffin 3y agoReading that memo is going to be a "hold my beer" moment for many, no doubt. I wonder how much of it was written by ChatGPT...
- lionkor 3y agoYou know, people can write text, too
- sologoub 3y agoGoogle has a strong culture of strat (strategy) papers. It reads like a well written one for sure.
- dist-epoch 3y agoEven if written by ChatGPT, or a bored high-schooler, you still need someone to select what version to submit. Many times this is where the skill is, in the selection, not in the production.
- AdamN 3y agoActually seems pretty strong and I really like that it's a memo and not a deck ( I guess that's the Amazonian in me speaking). Fundamentally they are aiming for billion dollar valuations and the company and the initial investors want to start strong without the need for subsequent raises anytime soon .... so it might just work out!
- ReDeiPirati 3y agoThey anticipated the need for a Series A in Q3 24 in the memo "In that round (Q3 2024), we expect to need to raise 200M, in order to train models exceeding GPT-4 capacities."
- rosebay 3y ago[dead]
- ddorian43 3y agoAnyone reached out to them to see what wages they're offering? Edit: Trying to see how they will compete with US based on paying EU salaries in a world that is becoming increasingly more remote.
- poulpy123 3y agoSalaries in France for this kind of positions will never compete with US salaries
- cmav 3y agoFrom what I've heard, close to Deepmind salaries, which is way less than the US, but still extremely high for French standards
- meinheld111 3y agoIdk but it seems generally not trivial to compare salaries because te hole shebang of social externalities and work environment. Afaik us salaries include neither retirement funds nor medical insurance, probably more missing.
- ddorian43 3y ago> Idk but it seems generally not trivial to compare salaries because te hole shebang of social externalities and work environment. Talking about gross amount as fully remote contract with no taxes paid by the company.
- Jean-Papoulos 3y ago[dead]
- TheFragenTaken 3y agoIt's a very impressive memo, but I'm not sure if I see anything here that's replicatable. It's clearly a sick team, whom have clients lined up (many of whom probably wont ever engage with an American AI firm until they find ways around Schrems II and, possibly III). Most four-week start ups are not in such a situation.
- littlestymaar 3y agoFrom the founder's list: > Cédric O: Former French Secretary of State for Digital Affairs That explains a lot actually, France is the epitome of crony capitalism, and having a former minister (from the current ruling party) is going to help a lot here…
- pm3003 3y agoYou're right, but not because of politics. Cédric O is part of the wave of businessmen who went into politics recently to follow Macron. He's however a typical French industry guy : went to one of a handful of elite highschools, then went to a business school that is part of the French equivalent of the Ivy league, then went to work for former state-owned entreprises and conglomerates, and major suppliers of the French government... In short, even before he went into politics, he was well-introduced in every clique of the French political-industrial milieu. And (un)surprisingly he's one of the more modern industry guys.
- littlestymaar 3y ago> Cédric O is part of the wave of businessmen who went into politics recently to follow Macron. Recently? He's been doing politics since at least 2006 (campaigning for Dominic Strauss Khan, a famous French politician better known abroad for his rape of a maid in a hotel in NY in 2011). > He's however a typical French industry guy : went to one of a handful of elite highschools, then went to a business school that is part of the French equivalent of the Ivy league, then went to work for former state-owned entreprises and conglomerates, and major suppliers of the French government That's true, but you're missing the key part here, which is what makes France special in that regard: he did that in parallel (and with the help) of his political career. He joined Safran thanks to his former MP Pierre Moscovici (Cedric O was his legislative assistant) who had become minister of the Economy in 2012 after Hollande's election (And Cedric O was the deputy director of François Hollande's victorious presidential campaign). This is very typical of the French Elite, were people involved in political parties often go back and forth between the public and private (or semi-private) sector with the help of their political network. The current prime minister has the same kind of background for instance. And there's even a word for that in French, it's called pantouflage.
- dna_polymerase 3y agoThey wield some authority (their respective positions at big AI companies/research centers) in the hot topic of the hour and got a lot of money from the usual VC crowd. I don't think this "deck" shows how talented or whatever Mistral is, it just shows how stupid the VC space is. Remember, nobody checked the FTX books. The Fed needs to raise rates significantly higher until this stops.
- candiddevmike 3y ago> The Fed needs to raise rates significantly higher until this stops It would be better to increase corporate and high net worth taxes, raising rates takes too long to have an effect.
- deleted 3y ago[deleted]
- Waterluvian 3y agoTo me Mistral is a cheap kitchen appliance brand so I looked it up. There’s a lot of brands named Mistral. Soap, windsurfing, apparel, alcohol, footwear, to name the first half of the first page of Google results. We can add AI to the pile. :) I’m not sure I understand the motivation behind picking a well-used name. Is there some strategic advantage to this?
- dist-epoch 3y agoOr maybe name just doesn't matter (as long as it's not mega-awful). Is "Hugging Face" a better name? Sounds like something from the Alien movie.
- whizzter 3y agoThe word comes from a strong wind in the Rhine valley and the south of France so I guess the usage hearkens back to that.
- andrewstuart 3y agoI wonder how much equity is exchanged for that cash.
- erispoe 3y agoThey raised at EUR 240m valuation post-money. So, 43%.
- poulpy123 3y agoWhile I fully support a french effort to be competitive in the AI industry, the memo is mostly empty apart for the 1 line bio of the team members that could or could not show the seriousness of the project. I hope that it's just the "executive" summary and that there is a real, detailled memo behind the $100 millions and that it's not just another "let's fund our friends" from the local capitalist class
- user_named 3y agoI believe they were promised the money before the company existed, that they started the company on the behest of the funders.
- _ugfj 3y ago[flagged]
- cracrecry 3y agoFor me it is clear that they have given that much money expecting they can get back way more having access to EU bureaucracy. In the EU bureaucracy is huge and they spend billions on taxpayer money. It really doesn't matter if those billions are wasted away or not. I have a company and I have to talk with EU politicians, most of them are clueless regarding technology, but they spend billions anyway, so you need to talk with them like they are 10 years old. It seems like they have a guy who is an specialist on just that and knows the right people.
- sho_hn 3y agoThe older I get, the more I understand the value of having tech people explain themselves to non-technology people.
- raverbashing 3y agoThis pretty much here. "Oh but non-tech people don't know the value of technology" Being condescending doesn't help much, and I bet they know a lot of things the tech people don't know or don't care about. And you might even disagree why it's not important but it is good to be aware, and not simply dismissive
- user_named 3y agoSince they didn't even bother to create a deck, it seems to me that they were promised this investment already, and making the pitch was just a formality. "Create a company and we'll give you 100m funding", is how I imagine it went. Second, seems like all six founding members are French, so this is really a French company, not a European one. Other countries will need to create their own becwof this.
- boeingUH60 3y ago> Cédric O, Former French Secretary of State for Digital Affairs. A member of the team.
- rsynnott 3y ago> In the EU bureaucracy is huge and they spend billions on taxpayer money. This is a fairly popular belief, but the EU's bureaucracy is actually pretty small. The entire EU civil service is only 40,000 people, most of them part time. Ireland is an EU country with about 1% the population of the EU, and also has about 40,000 civil servants, and 300,000 people in the wider public service. 1% of the per-capita civil servant requirements of an actual country really seems very lightweight. (The US federal civil service is 2.8m people, but this isn't a great comparison, as it handles a lot of stuff that in the EU would be the domain on national civil/public service)
- dave333 3y agoWho is going to be first to implement real time video analysis of politicians giving speeches and determining the truthfulness of what they say and growing their nose longer the more lies they tell.
- jerpint 3y agoThey do have a solid team of founders, that was probably enough to make the pitch
- mensetmanusman 3y agoIt's not the pitch that raised the money, it was the hype around GPT-4, and the realization/fear that the EU could miss the next tech boom if they are inattentive.
- TrackerFF 3y agoI don't know, the pitch seemed generic? Seems to me that it's the team + market that won the money.
- sheepscreek 3y agoElaborating on that: 1. The founding team’s track record and credentials. 2. there is currently no major independent player in the EU of OpenAI’s scale. 3. EU entities will prefer working with an EU based partner over OpenAI. Having the LLaMA tech lead is a win. Having someone ex-OpenAI can bolster their position even more. Now the anti-thesis: 1. It is gradually becoming apparent that models trained on high quality data don’t need to be so big. 2. phi-1 from Microsoft is < 1.3B parameters and can compete with GPT-3.5 reasonably well. 3. In addition, it seems GPT-4 is not one model, but a collection of 8 models trained on different datasets. Along with the above, all of a sudden - training GPT-4 like models is coming within the reach of an average person. All in - nobody has won this yet. And Meta open-sourcing their research was the cleverest strategic play that I’ve seen in a while. It has done so much to weaken their competitors while really pushing AI forward in an open way (so much for “OpenAI”).
- Shrezzing 3y ago> Seems to me that it's the team + market that won the money. That's pretty much it. Most analysts expect there's an addressable market of $20bn this year, growing to $100bn per year by the end of the decade. The market will be split between four or five companies. The number of people globally with the required expertise to create these models is in the tens (generously one hundred individuals). Three of those people are involved in this company now, and another five are joining in the next few weeks, each leaving senior positions at competitors. This one company has secured something in the order of 5-10% of the global talent pool for a $100bn/yr industry.
- user_named 3y agoI don't at all believe the people able to build models are that few. Aren't tons of people doing open source models already? I believe the number of people who have already built models to be low, but the number of people with the capability to build models to be very large. It's not magic.
- tomschwiha 3y agoI like that they seem to plan to open source a lot. Lets see.
- ToJans 3y agoReading through the memo, the GTM/use cases/market seem to be void of any kind of beachhead strategy? I see lots of technical stuff, but the complete business plan & roadmap seems to be lacking any kind of tangible use case that is showing me how they plan to differentiate? (The technical reasons they state seem to be fairy minimal, and I don't see anything that competitors couldn't do either.) The reason that I'm weary about this: I've spent a few years in an "innovation division" after customers repeatedly asked for such a service. Turns out the budget for long-running innovation-as-a-service is a hard sell, because in the end someone always has to pay for it, and innovation just for the sake of it gets old really quick. The long term survivors where the ones who continuously innovated for a particular use case - so more on a project basis... So I'd assume that, just like with blockchain & VR/AR, the biggest value will be in very specific use cases in very specific verticals, as opposed to the "spray & pray" approach, offering an "AI as a commodity". Or is this really just a EU FOMO play, i.e. US is doing it so Europe can't stay behind? (Probably hoping for EU funds/grants via that "Cedric O" guy.)
- Clueed 3y agoI've read it like this: They differentiate themselves from OpenAI/Anthropic/other major players by being in the EU and (more) open-source; they differentiate themselves from other European competitors by being as good as OpenAI. I think it's a fine proposition given the early market and their team, as long as this hypothesis holds true for years to come, > we believe that most of the value in the emerging generative AI market will be located in the hard-to-make technology, i.e. the generative models themselves, and they truly can compete with market leaders.
- ToJans 3y agoOk, so they're aiming for a more "spray & pray" kind of GTM, challenging the incumbents based on the premise that it'll be EU based. This basically then boils down to: "ChatGPT got x users in a week, and we want to do the same for EU.", without a clear path to profitability or guarantees. So it's effectively a humongously risky bet by EU VCs?
- Oras 3y ago> OpenAI and its current competitors have embraced a closed technology approach, which will dramatically reduce their market reach. Did it really reduced their market reach? However, for me the key differentiators are: - US is leading, EU is behind. - The team. Very impressive team.
- djoldman 3y agoMemo link: https://drive.google.com/file/d/1gquqRqiT-2Be85p_5w0izGQGgHvVzncQ/view https://drive.google.com/file/d/1gquqRqiT-2Be85p_5w0izGQGgHv... > We believe that most of the value in the emerging generative AI market will be located in the hard-to-make technology, i.e. the generative models themselves. This may be true, but it will be a lot easier to target usability and niche use cases than the modeling...
- whiplash451 3y agoMistral is getting a fair amount of bad press and unfair criticism. As an EU citizen, I am glad to see this initiative. I am worried by a couple things, however: - their market is not EU, but France: soon enough, UK and Germany will have their own Mistral. Each will have trivial access to their country's market (if only through politic backing) but accessing the neighbor's market will be an uphill battle. - they are just helping EU play catch-up, not be at the forefront. Like sama said in a recent tweet: "the most special thing about openai is the culture of repeatable innovation. it is relatively easy to copy something; it’s hard to do something for the first time. it’s really hard to do many things for the first time!" [1] [1] https://twitter.com/sama/status/1663983687241744393?s=20 https://twitter.com/sama/status/1663983687241744393?s=20