Mistral built a $14B AI empire by not being American

Describe making business in Europe with one evergreen sentence

They still use US clouds that can have information pulled by the US government.

There's probably a very good business to be made of bringing close to frontier knowledge and finetuning recipes and infrastructure to enterprises that cannot hire that talent. But that's largely not a business that is going to be of a lot of interest to technologists as consumers.

Don’t think it’s inconceivable that the clowns in power decide to limit api access out of the blue one day because someone whispered a conspiracy theory in someone’s ear. API blockade…

See also the constant flip flopping on what cards NVIDIA can export - no consistency in stance or coherent policy

Being in the EU does smooth a lot of things in terms of compliance, payment processing and whatnot, but I also like that their data retention and privacy policies are pretty clearly spelled out. I need to know something, there's a good chance it's explained outright somewhere and I don't need to read between the EULA lines and wonder what it means.

I do hit limits in terms of capabilities sometimes, and I'm sure other providers' services offer better results for some things. But the businesses ran on top of those more capable models feel too much like a scam at this point and I'd rather not depend on them for anything I actually need.

Devstral Small 2 was (and remains) a particularly strong small coding model, even beating larger open weights. Mistral's "problem" is marketing; other providers ship model updates constantly so they remain in the news and seem like they're "beating" the competition. And it works: people get emotionally attached to brands and models, deciding who's better in the court of popular opinion, and that drives their choices (& dollars).

In particular, the framework under which European companies can transfer data to US companies at all is beyond fragile.

1. Starting shit.

2. Thinking about starting shit.

At least in the EU people are willing to pay more for fewer features so long as the two mentioned points are not the entire strategy.

China isn't going to be friendly any time soon and so far America seems to be getting more in rather than less hostile. It wasn't that long ago that an American-Danish war was a realistic scenario.

but, if you are lucky, you can but enough time to become competitive in that sector.

American designed. The GPUs are made in Taiwan, the RAM in South Korea, using machines from the Netherlands' ASML.

True independence is indeed hard and expensive. But it's also not the job of Mistral to tackle all the layers at the same time, not even the state-owned corporations of western Europe in the 20th century (and the EU isn't (yet) even a state) tried to tackle every stage of an industrial process by themselves.

Some of the use may be legal requirement, some is sponsored (as I would expect French government to do, to some extent EU), some are simply moral moves from >95% of the mankind not living in US who watch the news at least a bit. US isn't that big in many regards and its actively harming its reputation daily to the point there is little left.

It's not a purity test. Relying on US chips in not the same deal-breaker for all but the most extreme situation as relying on a poorly regulated US company to run the inference.

This is the same Europe that is gladly mandating age verification for citizens accessing online services, and that is made up of countries that routinely censor speech. There's also a variety of values that make up pan-European politics, both from a national and ideological perspective, that could make these efforts fracture.

If the idea is to not be subject to foreign pressure, maybe there's a short-term argument to be made for this, but like you say, they'll still be vulnerable to hardware imports, which is arguably the main vulnerability.

If the idea is to protect human rights on the continent, this does nothing.

Well, you're pointing out a dissonance in a common AI (stock) booster argument: What if the hardware has lasting power?

If it does, then a company like Mistral can buy their capacity once from Nvidia (as in, once for each unit of capacity), then use it for a sustainable amount of time. No one forces them to scale beyond what's useful to the company and a mature user base. Provider dependence fades over time. That's a problem with Nvidia's current valuation.

If hardware doesn't last over that time, then the amount of cash invested in data center hardware can't really be reconciled with the expected revenue of running them at scale, and these projects are bound to run at a deficit over too long for them to be sustainable. That's a problem with Nvidia's valuation.

With independence as a target, Mistral can pretty safely bet on the former scenario, and then prepare for a future with either a mature market of diversified hardware providers, or innovations in quality and capacity for hardware they already have.

This is a pretty naive and innocent take. There is good reasons to why customers might continue to find value in Mistral A.I.

(1) - There is no particular reason why "European" model should be worst than "Chinese" one. GDPR restrictions are not such a big deal and have been made lighter recently [1]. And contrary to China, Europe is not under hardware embargo.

(2) - Most domains are not software engineering and do not need ultra advanced and extremely large models with complex agent setup to reach their optimum in term of A.I usage.

(3) - At the opposite, there is pretty good reasons why companies would want to use European operators with the current geopolitical context (e.g Cloud Act, Risk of data leaks, Regulations, Taxes, Reputation, Geo-political risk, ...).

[1]: https://digital-strategy.ec.europa.eu/en/faqs/digital-packag...

The main point should not be the hardware or software itself, because these are just tools that can eventually be obtained. The real issue is development and its cost. US companies now have to cover substantial capital requirements for developing entirely new business models, capital that would likely never be accumulated in Europe. In the past, they competed globally, but in a more fragmented world this is no longer the case. As a result, the risk associated with such investments is higher because potential reward is smaller.

Mistral does not have to compete in the same way. It lacks both the ability and the intention to fight on the global stage against Silicon Valley capital. Instead, it can wait for the industry to stabilize and for business models to mature, then adopt them.

Over time, there will be standardized ways to train models to a certain quality, and key technologies will become less opaque. This is already happening. A similar pattern occurred in Europe with hosting services, for example Hetzner.

Mistral is not playing the same game. It is also unlikely that US attitudes toward Europe will change significantly even with a different administration, that Russia will stop trying to undermine the EU, or that China will become a fair and friendly player. All of this supports the case for local providers of critical infrastructure, which benefits companies like Mistral or similar European counterparts.

Exactly..

What happens when the capability of American models far exceeds the capability of non-American models? Wouldn't companies using American models have a huge advantage?

There is no absolute "most value" though. What’s true in a world were betting on the least worst horse like world empire of the day doesn’t necessarily fit when it global order accelerate transition to multipolar geopolitics boosted on nationalist steroids.

Definitely not really acceptable though nonetheless; you're a paying customer / subscriber that got 'scammed'...

Yep, and the comparison relies on key people believing the valuations.

Lots of mature companies will want their providers to be reasonably sheltered from the fallout of a coming US AI bubble burst.

...OTOH the cost of not sponsoring this in Europe may be complete technological obsolescence. Rock and a hard place situation.

This would also add pressure on other labs to keep being engaged in the open source ecosystem as a rug pull isn't a small danger IMO.

> actually in the 2nd

The mixup is easily explainable: machines write numbers in binary notation!

I tried Mistral Vibe (Claude Code equivalent) free tier for a week. I hit web_search limits but not limits for devstral-2. For a working mode where you watch it closely (same way I use Claude Code), it is fine.