Mistral AI was founded in 2023 by previous Meta and Google employees Credit: Rafael Henrique/SOPA Images/LightRocket via Getty Images)

French startup Mistral AI has been in talks with investors about raising several hundred million dollars at a valuation of $5bn.

The reported talks come just a few months after Microsoft invested $16m in Mistral and implemented the company’s AI models through its Azure cloud computing platform.

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Microsoft and Mistral’s partnership was criticised by EU lawmakers calling for an investigation into whether it was anti-competitive.

It is not clear which investors Mistral has spoken to about the new funding round, The Information reported, citing someone familiar with the matter. 

Mistral AI was founded in 2023 by former Meta and Google DeepMind employees. The France-based company specialises in open-source large language models.

The value of global AI deals totalled $331bn throughout 2023, an increase from $211bn in 2022, according to GlobalData’s deal database.

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In 2023, the value of global AI deals peaked in the second quarter (Q2), with the sector raising $119bn. This was a slight increase over the beginning of the year, which saw deals valued at $104bn. However, in Q3 the value of AI deals fell significantly lower, totalling $68bn.

GlobalData estimates that the AI global market will reach $909bn by 2030, growing at a compound annual growth rate of 35.2% between 2022 and 2030.