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I get worried when thinking about Mistral because they make mediocre models and I don't think they will be able to defeat their competition.

ludvigk 24d ago
Same here. And I doubt 3B EUR will do anything (remember the >$100B investment round that OpenAI got?) In the EU it seems we are very much at risk of being cut off from frontier AI if the US government should decide to do so.
- cbg0 24d ago
  Blocking EU from those services would crash the valuation of US AI companies, so I'm not expecting it to happen.
- 0xDEAFBEAD 24d ago
  OpenAI also indirectly depends on ASML, but sadly Europe seems too cowardly to leverage this dependency at the moment.
  - clarionbell 24d ago
    If EU were to "leverage" ASML, and that would require rather unlikely approval of Netherlands, it wouldn't end very well. Already shipped machines can not be taken back, nor can they be stopped. Sure, you can cut the support, and buildup of new fabs will be stalled. But the other side, Chinese or USA, has many more levers to pull. Raw materials, energy (LNG), was majority of consumer goods, solar panels, batteries, semiconductors. EU doesn't mine or make most of them, and isn't nowhere close to even starting, instead, industrial base is already shrinking. Even worse, ASML may dominate EUV, but other suppliers do very well in DUV. The moment ASML becomes unreliable, all of them will get infusion of money, as they become national security issue. What about ASML subsidiaries in USA, like Cymer and ASML Wilton, will they take the bullet for the parent? Or will they become part of new competitor, with all the knowhow. And China has already set domestic capacities in this area as a national priority.
- slopinthebag 24d ago
  You'd still have access to the Chinese models though right? Even if you want to argue they aren't truly SOTA they're still pretty dang good.
loehnsberg 24d ago
Maybe true for frontier LLM, but there's plenty of space in the niches. For example, I think their TTS/STT models are pretty good, speaking from personal experience.
- aurareturn 24d ago
  Is there money in niche models?
  - catdog 24d ago
    Is there money in frontier?
    - vineyardmike 24d ago
      Yes...? Is that not self evident by the insane revenue from frontier labs?
      - mastermage 24d ago
        Revenue is not profit. https://isaiprofitable.com/ https://isaiprofitable.com/
        slopinthebag 24d ago
        Lol that chart is hilarious when you look at Nvidia. Always sell shovels in a gold rush I guess
        mastermage 22d ago
        I mean yeah
        aurareturn 24d ago
        AI is profitable. Gross margins are high. The only reason OpenAI and Anthropic are making a loss is due to training new models to keep up with competition - not because the industry is flawed in terms of business model.
alastairr 24d ago
That may be true, but there's a non zero chance that frontier AI becomes a controlled export, and that 'local' production becomes a prudent play.
- skeledrew 24d ago
  Highly improbable given China is ready to pick up any slack.
  - alastairr 24d ago
    That's true now, but given the strategic importance of AI to nation states and the fractious relationship many have with China, I wouldn't expect the eagerness to use Chinese AI to continue indefinitely.
    - skeledrew 24d ago
      If you're taking it at the state level, there's no difference between Chinese and US frontier models. They go with the most accessible, which is the former. Just as trade still happens overwhelmingly between China and US despite the politics.
      - alastairr 24d ago
        Again - true now, but not certain to be so in the near future - which (I speculate) is part of the investment case for mistral.
koe123 24d ago
They’re in the EU. If they are a year or so behind and things start to plateau they’ll catch up. Americans perhaps don’t realize we can also tariff their digital goods to protect our own. There is a scenario where Americans and Chinese foot the bill and EU gets out cheap, e.g. similar to the Apple approach to AI.
amelius 24d ago
Maybe because they respect copyright laws?

ludvigk 24d ago

Same here. And I doubt 3B EUR will do anything (remember the >$100B investment round that OpenAI got?) In the EU it seems we are very much at risk of being cut off from frontier AI if the US government should decide to do so.

cbg0 24d ago
Blocking EU from those services would crash the valuation of US AI companies, so I'm not expecting it to happen.
0xDEAFBEAD 24d ago
OpenAI also indirectly depends on ASML, but sadly Europe seems too cowardly to leverage this dependency at the moment.
- clarionbell 24d ago
  If EU were to "leverage" ASML, and that would require rather unlikely approval of Netherlands, it wouldn't end very well. Already shipped machines can not be taken back, nor can they be stopped. Sure, you can cut the support, and buildup of new fabs will be stalled. But the other side, Chinese or USA, has many more levers to pull. Raw materials, energy (LNG), was majority of consumer goods, solar panels, batteries, semiconductors. EU doesn't mine or make most of them, and isn't nowhere close to even starting, instead, industrial base is already shrinking. Even worse, ASML may dominate EUV, but other suppliers do very well in DUV. The moment ASML becomes unreliable, all of them will get infusion of money, as they become national security issue. What about ASML subsidiaries in USA, like Cymer and ASML Wilton, will they take the bullet for the parent? Or will they become part of new competitor, with all the knowhow. And China has already set domestic capacities in this area as a national priority.
slopinthebag 24d ago
You'd still have access to the Chinese models though right? Even if you want to argue they aren't truly SOTA they're still pretty dang good.

loehnsberg 24d ago

Maybe true for frontier LLM, but there's plenty of space in the niches. For example, I think their TTS/STT models are pretty good, speaking from personal experience.

aurareturn 24d ago
Is there money in niche models?
- catdog 24d ago
  Is there money in frontier?
  - vineyardmike 24d ago
    Yes...? Is that not self evident by the insane revenue from frontier labs?
    - mastermage 24d ago
      Revenue is not profit. https://isaiprofitable.com/ https://isaiprofitable.com/
      - slopinthebag 24d ago
        Lol that chart is hilarious when you look at Nvidia. Always sell shovels in a gold rush I guess
        mastermage 22d ago
        I mean yeah
      - aurareturn 24d ago
        AI is profitable. Gross margins are high. The only reason OpenAI and Anthropic are making a loss is due to training new models to keep up with competition - not because the industry is flawed in terms of business model.

alastairr 24d ago

That may be true, but there's a non zero chance that frontier AI becomes a controlled export, and that 'local' production becomes a prudent play.

skeledrew 24d ago
Highly improbable given China is ready to pick up any slack.
- alastairr 24d ago
  That's true now, but given the strategic importance of AI to nation states and the fractious relationship many have with China, I wouldn't expect the eagerness to use Chinese AI to continue indefinitely.
  - skeledrew 24d ago
    If you're taking it at the state level, there's no difference between Chinese and US frontier models. They go with the most accessible, which is the former. Just as trade still happens overwhelmingly between China and US despite the politics.
    - alastairr 24d ago
      Again - true now, but not certain to be so in the near future - which (I speculate) is part of the investment case for mistral.

koe123 24d ago

They’re in the EU. If they are a year or so behind and things start to plateau they’ll catch up. Americans perhaps don’t realize we can also tariff their digital goods to protect our own. There is a scenario where Americans and Chinese foot the bill and EU gets out cheap, e.g. similar to the Apple approach to AI.

amelius 24d ago