Mistral to explore designing own chips, CEO says, as it ramps up infrastructure build

French startup Mistral AI is setting its sights on creating its own chips, as revealed by CEO Arthur Mensch in a recent interview with CNBC. This marks a significant step for the company as it seeks to enhance its infrastructure in the competitive AI landscape dominated by American firms like OpenAI and Anthropic. Mensch expressed enthusiasm about the possibility of Mistral developing proprietary semiconductors, noting that such custom chips could significantly reduce the costs associated with processing AI data tokens. Currently, Mistral relies on Nvidia as a trusted partner while experimenting with various options. Valued at nearly 12 billion euros, Mistral is not only focused on AI model development but is also investing in data centers utilizing Nvidia chips. The firm is positioned as Europe’s counterpart to leading AI companies and has major clients, including chip manufacturing giant ASML. Should Mistral pursue its own chip designs, it would mirror the strategies of major U.S. tech players like Amazon and Google, who have successfully integrated custom semiconductors into their operations. These application-specific integrated circuits allow companies greater control and potentially create competitive advantages in hardware and software integration. Recently, Mistral announced the establishment of a new data center in France dedicated to AI model inferencing. The company has committed 4 billion euros towards expanding its data center capabilities in France and Sweden, aiming to enhance its computing power amidst a lagging European infrastructure. Mensch emphasized that Europe faces both technological and macroeconomic challenges, noting a shift in perception where AI is increasingly recognized as a strategic resource, akin to energy resources. He highlighted the urgency for Europe to address its commercial deficits to remain competitive globally. The newly expanded computing capacity will support Mistral’s current clients and various AI labs, which are in high demand for computational resources. Mistral is prioritizing access to this compute power for its customers while also catering to the needs of external AI labs, which have expressed significant interest in their services. In a bid to strengthen its market position against U.S. competitors, Mistral has also launched a new enterprise platform called "Vibe." This innovative tool is designed to perform a variety of tasks, including drafting documents and coding, showcasing the growing trend towards agentic AI solutions that function autonomously for users. According to Timothée Lacroix, Mistral's CTO, Vibe enables users to simply provide a brief and allows the platform to handle the rest, efficiently delivering completed work from a single interaction. These developments reflect Mistral's ambition to accelerate revenue growth, with a target of reaching 1 billion euros by 2026, a significant increase from last year’s 200 million euros. Despite this goal, Mistral's projections remain modest compared to the impressive financial performance of industry leaders like OpenAI and Anthropic, which reported annual revenues of $20 billion and $10.9 billion, respectively.