Europe probes Microsoft's €15M stake in AI upstart Mistral

[mesmertech]

Love it as a consumer because Mistral is probably not doing any more open weights if they get tangled with Microsoft.

But man, as a business owner in EU, this would just make me not want to build an AI startup in EU

[rsynnott]

> But man, as a business owner in EU, this would just make me not want to build an AI startup in EU

Like, purely on the basis that MS might not be allowed to take you over?

TBH I'd assume the FTC would at least be asking questions here, too. EC and FTC thinking on competition is generally not all _that_ different, but the EC tends to be quicker to act these days (this was not always the case; the FTC was very much out in front on Intel and Internet Explorer back in the day).

[janice1999]

> But man, as a business owner in EU, this would just make me not want to build an AI startup in EU

If a Chinese company with massive government contracts had invested in OpenAI there is no way that the US would not start an investigation.

[mythz]

Time will be the ultimate judge but Mistral's Co-founder/CEO is still committing to be a leading provider of open weight models [1]:

> Clarifying a couple of things since we’re reading creative interpretations of our latest announcements:

- We’re still committed to leading open-weight models! We ask for a little patience, 1.5k H100s only got us that far.

- We have a reselling agreement with Microsoft, that we’re very excited about. Alongside similar partnerships, it will accelerate our growth.

- Microsoft invested in a small convertible note alongside many other companies, as a distribution partner. We are an independent European company with global ambitions, that part is not changing either.

> We’re seeing some interest for Le Chat and Mistral Large, on both la Plateforme and Azure, and we’ll be iterating fast!

[1] https://twitter.com/arthurmensch/status/1762818733016322168

[t8sr]

The current lack of anti-monopoly enforcement and corporate oversight in the US is a race to the bottom. Should the rest of the world compete by letting corporations run amok, acquire all competition and build monopolies? Or should they try to regulate, but risk driving away founders for whom the American legal environment is extremely lucrative?

It's similar to the debate France had about raising the progressive tax rates - some ultrarich people would rather give up their French residency, than pay higher taxes.

There's clearly stuff the EU could do to be more competitive, but I think the core issue is that American investors can expect less risk and bigger payoffs, because the environment is friendlier to them, but the environment being friendlier to them leads to regular people getting screwed by giant companies that operate with no oversight. Fast forward the 2020s and you literally have planes falling out of the sky.

I don't think there are any great options.

I'm also aware this is a fringe view on HN, kinda by definition. It's a forum for founders, mostly in the US, and the median opinion on what you should be able to do with your company on here is extreme by most peoples' standards. But the echo chamber needs some dissent on this point.

[whiplash451]

This move from MSFT is clearly perceived as aggressive from EU given how fragile EU sovereignty in AI is at this point.

If EU wants to own its AI future, that’s not a great way of getting started.

[nerbert]

Personally, growing a startup enough to catch the eye of EU regulators is a problem that I’d like to have.

[JumpCrisscross]

> Love it as a consumer because Mistral is probably not doing any more open weights if they get tangled with Microsoft

The solution is to mandate open weights. Not kneecap your flagship by putting it at a permanent capital disadvantage.

[neverrroot]

It's tough, it's also part of the reason so little is done here, just compare the size of market capitalization of say DAX40 (German top 40) or CAC40 (French top 40):

DAX40 $1.9T

CAC40 $2.8T

There are single companies in US that exceed both of these values.

[almatabata]

> But man, as a business owner in EU, this would just make me not want to build an AI startup in EU

I am not an expert but does this kind of probes not help businesses against things like hostile take overs and against VC buying up all your competitors to crush you with scale?

[crimsoneer]

I mean, the FTC would absolutely look into this agreement if you did it in the US. Regulators "looking into" things is not a thing we should be upset about, that's why they exist.

[dmezzetti]

Totally agree with this sentiment. I love open-source and will be on it's side to the end. But I'm not sure I want it forced upon people either. Companies should believe in the model and developers should choose companies that believe in that model.

[ljm]

I imagine there has to be some kind of security implication here, the same reason why the US is restricting the export of AI chipsets to china. It's not ideal if US megacorps are heavily investing in or buying out EU AI startups.

[odood]

15 million in Mistral vs 13 billion in OpenAI. There must be a different reason at play here.

[dacryn]

if you can handicap a competitor for 15 million to save your 13 billion investment, go for it

There is a reason EU is investigating this, and this is exactly it. They are sick of the Microsoft extinguish aspect

[mrkramer]

Microsoft only invested $16M....lol.....I thought Mistral would demand more but I guess partnership with Microsoft is more valuable than cash.

[pelorat]

To be honest. $16M is a huge amount of money for most companies based in Europe.

[whiplash451]

To be frank, I am more worried about the fact that they raised $385M from US investors at the seed stage. That speaks volume about how much it really is an EU company. Good luck to EU for retaking control of this ship.

[throwaway55671]

385M USD is way too much for EU investors. They usually invest 10x-100x less. So the alternative without US investors would be to have no startup of this kind - great job, that will really help EU grow!

[Alifatisk]

Damn, that’s an interesting point