AI lab Mistral has raised €1.7 billion ($1.99bn) in a funding round led by chipmaking equipment manufacturer ASML.

The funding round values the French business at €11.7 billion ($13.67bn). Alongside ASML, existing investors DST Global, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, Lightspeed, and Nvidia have also committed more cash.

Mistral says it will use the money to “fuel our scientific research to keep pushing the frontier of AI to tackle the most critical and sophisticated technological challenges faced by strategic industries.”

Founded in 2023, the company is widely viewed as Europe’s closest challenger the big US AI companies such as OpenAI and Anthropic, and its products, including the Le Chat chatbot, are used by big names in industry as well as several European governments.

Its last funding round, in 2024, valued the business at $6.2bn (€5.8bn). It follows reports in July that the company was seeking €1.17 billion ($1bn) in debt and equity financing.

“This investment brings together two technology leaders operating in the same value chain,” said Mistral AI CEO Arthur Mensch. “We have the ambition to help ASML and its numerous partners solve current and future engineering challenges through AI, and ultimately to advance the full semiconductor and AI value chain.”

Mistral also runs its own AI cloud, Mistral Compute, which offers access to the company’s products and the ability to rent GPUs for powering other AI systems.

The company initially used infrastructure from Microsoft Azure and Google Cloud to train and run its AI models, and more recently has turned to AI cloud provider CoreWeave for GPU access, as well as investing in its own infrastructure.

In February, it announced its first 40MW GPU cluster in France, which will be hosted by AI cloud provider Scaleway at a data center outside Paris owned by Eclairion. This is due to come online later this year. DCD visited the data center and profiled Eclairion as part of our cover feature in the last edition of the magazine.

Then in May, Mistral announced it was joining forces with investment bank Bpifrance, UAE investment fund MGX, and Nvidia to build a 1.4GW AI data center in the Paris region, which could be online by 2028.

While the direct synergy between Mistral and companies such as Nvidia is obvious, ASML, the Dutch firm that is the world’s only manufacturer of advanced lithography equipment used to make all leading-edge semiconductors, operates in a very different part of the tech supply chain. However, both companies are seen as critical to Europe’s bid to increase its digital sovereignty and reduce reliance on American vendors, which dominate the continent’s cloud and AI markets.

“ASML is proud to enter a strategic partnership with Mistral AI, and to be lead investor in this funding round,” said ASML CEO Christophe Fouquet. “The collaboration between Mistral AI and ASML aims to generate clear benefits for ASML customers through innovative products and solutions enabled by AI, and will offer potential for joint research to address future opportunities.”