Dutch semiconductor company ASML confirmed on Tuesday that it had entered into a long-term partnership with French artificial intelligence startup Mistral AI by investing 1.3 billion euros ($1.53 billion), thus becoming its largest investor.
The two companies will work together to explore how artificial intelligence can be used across ASML's products, research, development and operations, they said.
This confirmed weekend reports that the Dutch company invested in the French AI hopeful.
Mistral AI raised a total of 1.7 billion euros in its latest funding round, it said on Tuesday. ASML's investment made it Mistral's main shareholder with a stake of about 11%. At the same time, the deal is largely seen as a boost to Europe's ambitions in the rapidly developing artificial intelligence field.
The latest funding round gives Mistral an 11.7-billion-euro valuation, it said in a statement, thus becoming the most valuable AI company in Europe. It is seen as the continent's most credible rival to U.S. giants such as OpenAI, Meta and Alphabet's Google.
ASML will also partner with Mistral to integrate AI models across its semiconductor equipment portfolio and gain a board seat on the French startup's strategic committee through finance chief Roger Dassen.
Mistral, founded in 2023 by former researchers from Google DeepMind and Meta, has positioned itself as Europe's AI alternative to the U.S. and is a centerpiece of France's strategy to become a leading AI competitor.
However, it is still worth only a fraction of its U.S. peers. OpenAI is eyeing a valuation of around $500 billion in a potential stock sale, a source familiar with the matter told Reuters in August, more than 40 times Mistral's valuation.
The deal "aims to generate clear benefits for ASML customers through innovative products and solutions enabled by AI," the Dutch firm's boss, Christophe Fouquet, said in a statement, pointing to "potential for joint research" in the future.
Mistral chief executive Arthur Mensch said its AI could help ASML "solve current and future engineering challenges," leading to benefits for both semiconductor hardware and the AI software that runs on it.
The Dutch company has recently strengthened its French connections by appointing former French Finance Minister Bruno Le Maire as a special adviser to its executive board. It is also led by French CEO Christophe Fouquet, who took the helm in 2024.
"It helps that ASML is well connected to the industrial and political establishment to pick and choose its partners," said ING analyst Jan Frederik Slijkerman.
"There is an industrial rationale to develop products together," he added. "For ASML, it is probably easier to develop AI-based products through a partnership than to do this in-house."
Besides ASML, other investors who joined the fundraising are DST Global, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, Lightspeed and Nvidia, Mistral said.
Mistral's fundraising comes after months of rumors that it could be the target of a takeover bid by Apple, which has lagged other tech giants in developing its own AI.
However, the latest funding round "reaffirms the company's independence," Mistral said in its statement.
Tying Mistral more closely into the wider European high-tech sector through ASML was necessary to compete, the founder of AI and data firm Ekimetrics, Jean-Baptiste Bouzige, told Agence France-Presse (AFP).
"There's no way to be in the fight in this sector while remaining strictly French," he said, adding that "Europe is the appropriate scale" for a company like Mistral.
Mistral's key products include Le Chat, a large language model (LLM) chatbot, competing with the likes of ChatGPT.
As well as text, Mistral offers generative AI models capable of turning out images and computer code.
The company has opened offices in Paris, London, Luxembourg, New York, California's Palo Alto and Singapore and expanded to over 350 staff.
One factor setting it apart has been its practice from the beginning of releasing "open source" versions of its AI models, allowing other developers to run and modify them for their own purposes.
This year, Mistral has announced a slew of partnerships, including with American chip giant Nvidia to create a cloud computing platform, or with Saudi investment fund MGX to build an AI campus outside Paris.
Mistral has also signed a deal with AFP for Le Chat to draw on the news agency's decades of archives in six languages to generate responses to users' queries about news and current events.
ASML's shares were up 1% in early Amsterdam trading, giving it a market value of 268 billion euros.
