Microsoft may not be lumping all of its AI ambitions in the OpenAI pot, after it emerged this week that it has struck a deal with a French AI startup.
On Monday Microsoft confirmed in a statement that it has signed “a multi-year partnership” with “Mistral AI, a recognised leader in generative artificial intelligence.”
Microsoft has already invested a rumoured $13 billion in San Francisco-based OpenAI – an investment that has already prompting regulatory scrutiny.
Mistral AI
Microsoft’s OpenAI investment deal allowed Redmond to gain access to OpenAI’s cutting edge models and rights to share OpenAI’s profits.
But its mammoth investment has reportedly not given Microsoft a stake in OpenAI.
Despite this, in December the British competition regulator, the Competition and Markets Authority (CMA), began seeking feedback about the relationship between Microsoft and OpenAI, and whether it has any antitrust implications.
Then in January 2024, the European Commission said it was investigating whether Microsoft’s investments into OpenAI may fall under EU merger rules.
Microsoft meanwhile is investing significantly less money in Paris-based Mistral AI compared to OpenAI, at least according to its statement.
Microsoft has made a 15-million euro ($16 million) investment in Mistral, and will make the company’s AI models available via its Azure cloud computing platform as part of the multi-year partnership.
That small funding will reportedly convert into an equity stake in Mistral AI’s next funding round.
“The AI industry is undergoing a significant transformation with growing interest in more efficient and cost-effective models, emblematic of a broader trend in technological advancement. In the vanguard is Mistral AI, an innovator and trailblazer,” said Microsoft.
“Their commitment to fostering the open-source community and achieving exceptional performance aligns harmoniously with Microsoft’s commitment to develop trustworthy, scalable, and responsible AI solutions,” it added.
“We are thrilled to embark on this partnership with Microsoft,” said Arthur Mensch, CEO of Mistral AI. “With Azure’s cutting-edge AI infrastructure, we are reaching a new milestone in our expansion propelling our innovative research and practical applications to new customers everywhere. Together, we are committed to driving impactful progress in the AI industry and delivering unparalleled value to our customers and partners globally.”
Antitrust concerns
But Microsoft’s surprise deal with Mistral AI this week has prompted antitrust concerns in Europe.
Reuters has reported some EU lawmakers are demanding an investigation into what they see as a concentration of power by the tech giant.
Mistral’s deal with Microsoft has led questions about Mistral AI’s motivations, when during discussions about the EU’s wide-sweeping AI Act, it had reportedly lobbied for exemptions for some AI systems, warning that overly strict laws would hamper European startups’ chances of competing with US-based giants.
“What is emerging shows even more that it was good not to water down our ambition on the safety of GPAI (general purpose AI) models with systemic risks, following legitimate but strong lobbying from companies like Mistral,” Brando Benefei, a member of the European Parliament (MEP) who oversaw the drafting of the AI Act, was quoted by Reuters as saying.
Alongside Germany and Italy, France also pushed for exemptions for companies making generative AI models, to protect European startups such as Mistral from over-regulation.
“That story seems to have been a front for American-influenced big tech lobby,” Kim van Sparrentak, an MEP who worked closely on the AI Act, was quoted by Reuters as saying. “The Act almost collapsed under the guise of no rules for ‘European champions’, and now look. European regulators have been played.”
A third MEP, Alexandra Geese, told Reuters the announcement raised legitimate questions over Mistral and the French government’s behaviour during the negotiations.
“There is a concentration of money and power here like the world has never seen, and I think this warrants an investigation,” Geese reportedly said.
The French government did not immediately respond to a request for comment, Reuters reported.
