PARIS – Arthur Mensch, the co-founder of French artificial intelligence hope Mistral AI, sees a springboard for his company and Europe’s technological hopes in the success of cutting-edge Chinese chatbot DeepSeek.
China’s AI breakthrough alarmed the tech world and rocked financial markets by showing that the technology could be built at a far lower cost than the billions of dollars being invested by United States-based firms.
For France, as it welcomes heads of state and the AI world’s leading lights for an AI Action Summit this week, it’s an opportunity.
DeepSeek is “a player that is very similar to us,” Mensch told POLITICO in an interview, even going so far as to call it “China’s Mistral.”
“They’re certainly better funded, but it’s very similar because we’re about the same age,” he said.
Mistral AI carries on its shoulders France’s hopes of competing with its U.S. rivals. The company has raised record amounts for a European startup: more than €1 billion since its launch in 2023, for a valuation of €6 billion.
But it is still a long way behind the AI vanguard – OpenAI, Anthropic and xAI, – which have raised 10 or even 20 times as much.
This is where DeepSeek offers a sliver of hope as its R1 model rivals the leading U.S. models, at a fraction of the cost and chips used by AI pioneer OpenAI.
“They have made extensive use of the technologies we made available in 2023,” Mensch said of DeekSeek, referring to a machine learning technique called the sparse Mixture-of-Experts (SMoE).
This approach, refined by Mistral AI, is designed to reduce computing costs during pre-training.
“We explained how to train them, and made the first models available. DeepSeek has scaled it up,” said Mensch.
Mistral AI now intends to draw inspiration from DeepSeek’s innovations.
“They have a scientific approach, and close doors by identifying what doesn’t work. Closing these doors means saving time for others. We’ll have things to offer very soon,” Mensch said.
He also sees the DeepSeek moment as a confirmation of his company’s bet on open-source models, which are also backed by Meta and stand in contrast to OpenAI.
The world of AI “closed up a bit in 2019 under the impetus of OpenAI, but it’s opening up again. We’re convinced that open source is going to win,” Mensch said.
Building up the backbone
The AI race cannot be won without “heavy computing infrastructure,” Mensch said.
This is an area where the European Union may struggle to provide the power and the investment needed, certainly in comparison to the U.S. where President Donald Trump recently announced a $500 billion plan to build the infrastructure needed to cement U.S. dominance in AI.
Mensch said his firm would soon be able to rely on a new data center in the Paris region, called Eclairion and located on the Saclay plateau, which has some €300 million in backing from HPC Capital and €3 million in support from the Île-de-France region.
Mensch said Mistral AI will also be funding the project to the tune of “several billion euros” over the coming years along with partners and “partner-clients.”
Based on graphics processing units supplied by AI chip giant Nvidia, the project will add to the computing capacity Mistral AI has already gained from Microsoft.
“We chose France because it offers low-carbon, highly competitive electricity. We’re also doing it out of conviction,” Mensch said.
France’s AI champion
Mistral AI is a French political darling, with French President Emmanuel Macron greeting its free application for its Le Chat chatbot last week with an enthusiastic post, declaring “vive Le Chat!”
The French government has also stepped up its support for the flagship startup with a series of contracts. Over the past two weeks, it has announced public-private partnerships with Mistral AI — one with the Ministry of the Armed Forces, the other with the public employment agency France Travail.
At the same time, Macron called on the private sector to buy European. “When you have two technological solutions, one European and one American, you have to choose the European one,” he argued during a videoconference with around twenty European business leaders last week, POLITICO has learned from a source close to the exchange.
That message got through. Just before the AI summit, French groups Veolia and Iliad both announced a partnership with the Mistral AI.
“There is a growing awareness on the public side. They realize that administrations need to work in partnership with Europe’s industrial fabric to speed it up, in the same way as the United States does,” said Mensch. “In the private sector too, there is a growing awareness that we need to host our own […] to be part of the global economy.”
For Mensch, this week’s AI summit comes at “a geopolitical moment with India’s Prime Minister Narendra Modi co-chairing the event.
“It shows that there is a world outside the U.S. and China and that it needs to embrace artificial intelligence. Europe is a leader in this world,” Mensch said.
Paris’ call for the European Commission to present an innovation plan at the summit also gives a chance to “ensure that Europe once again has something to say, and once again tells a happy story,” Mensch said.
“We’ve heard a lot from commentators, Americans in fact, that Europe is in technological decline. I don’t think that’s true.”
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