French AI Startup Mistral Secures $3.5B in Samsung-Backed Funding Round

French artificial intelligence company Mistral announced that it raised €3 billion, or $3.5 billion, in a Series D round led by South Korea’s Samsung. This boosted its post-money valuation above €21 billion, which is close to double what it stood a year earlier.

Mistral bags new cash injection, valuation jumps

Samsung Electronics and Scaleup Europe Fund led the funding round. Other investors include Advent, funds managed by BlackRock, and the Grand Duchy of Luxembourg. Previous investors like a16z, ASML, General Catalyst, Lightspeed, Nvidia and Salesforce Ventures also participated.

This new cash injection boosted Mistral’s valuation. Just a year ago, the company was valued at €11.7 billion after a Series C round led by Dutch chip equipment maker ASML. 

Chief Financial Officer Johan Bergqvist said that the fundraising makes the company Europe’s second-highest-valued private tech group and its fastest-growing. However, the firm is still far behind its U.S. competitors like Anthropic, which has a valuation of around $965 billion, and OpenAI at $852 billion. The companies are reportedly planning public listings this year. 

When asked about a possible IPO, Bergqvist said it was “always of course an optionality for us going forward,” but the timing is “still up in the air.”

Capital allocated for data centers and computing

CEO Arthur Mensch said Mistral’s capital will go mainly to building data centers and computing infrastructure the company can own outright instead of leasing from cloud providers. 

“Long term, the plan is to fully rely on capacity that we are building ourselves, and so that means that the amount of compute that we own is going to grow around 100% in the next five years,” Mensch told CNBC.

Notably, the company completed an $830 million debt raise earlier in the year to help fund a data center outside Paris equipped with more than 13,000 Nvidia GPUs. A second facility valued at €1.2 billion is also under construction in Sweden. The two sites are targeting 200 megawatts of European capacity by the end of 2027. 

A partnership with Microsoft was announced this year as well. Microsoft aims to tap capacity in European data centers for its cloud and AI customers, while integrating the startup’s models into Microsoft Foundry and Copilot Studio. The tech company did not participate in this funding round, according to Bergqvist.

Meanwhile, revenue has been growing as the infrastructure was being put in place. The company has over 125 enterprise customers in 20 countries, including Airbus, ASML and HSBC.

Mensch and Bergqvist said the firm is still on track to surpass $1 billion in annual recurring revenue by year’s end. 

“We’re very confident that the fundraising we are doing today is also accelerating and enabling further growth down the line in 2027,” Mensch said.