Microsoft partners with Mistral in second AI deal beyond OpenAI

Microsoft has announced a new multiyear partnership with Mistral, a French AI startup that’s valued at €2 billion (about $2.1 billion). The Financial Times reports that the partnership will include Microsoft taking a minor stake in the 10-month-old AI company, just a little over a year after Microsoft invested more than $10 billion into its OpenAI partnership.

The deal will see Mistral’s open and commercial language models available on Microsoft’s Azure AI platform, the second company to offer a commercial model on Azure after OpenAI. Much like the OpenAI partnership, Microsoft’s partnership with Mistral will also be focused on the development and deployment of next-generation large language models.

Mistral is announcing a new AI model today, called Mistral Large. It’s designed to more closely compete with OpenAI’s GPT-4 model. Unlike some of Mistral’s previous models, it won’t be open source. “Mistral Large achieves strong results on commonly used benchmarks, making it the world’s second-ranked model generally available through an API (next to GPT-4),” says the Mistral AI team.

Mistral Large is available on Mistral’s own infrastructure, hosted in Europe, or through Azure AI Studio and Azure Machine Learning. Mistral Small will also be available today, offering improved latency over Mistral’s 8x7B model. Mistral is also releasing a new conversational chatbot, Le Chat, that’s based on various models from Mistral AI.

Mistral’s models have typically been open source, but the partnership with Microsoft means the French AI company can now explore more commercial opportunities. Neither Microsoft nor Mistral are disclosing details of the investment, though.

Microsoft’s investment comes months after a rocky period for its main AI partner, OpenAI. On November 17th, OpenAI’s board abruptly announced that co-founder and CEO Sam Altman was fired, but Altman returned as OpenAI CEO just days later on November 30th. During all the turmoil, Microsoft managed to get a nonvoting observer seat on the nonprofit board that controls OpenAI, providing the software giant with more visibility into OpenAI’s inner workings but with no voting power on big decisions.