The deal provides Mistral with a major injection and makes it one of Europe’s most valuable private companies
[AMSTERDAM] ASML Holding is investing 1.3 billion euros (S$2 billion) in France’s Mistral AI, an unusual move for the Dutch chipmaking equipment company that shores up Europe’s most important artificial intelligence startup.
With the investment, ASML becomes the largest shareholder in Mistral with an 11 per cent stake, the companies said in a statement on Tuesday (Sep 9). Mistral, which develops AI models and a chatbot, said the investment is part of a 1.7-billion euro funding round. That roughly doubles its valuation to 11.7 billion euros and makes it one of Europe’s most valuable private companies.
The alliance gives Mistral, Europe’s only credible rival to AI giants such as OpenAI, the backing of one of the continent’s biggest and most powerful tech companies. It is a victory for the bloc’s sovereign tech movement, which calls for less reliance on tools from Silicon Valley and has been gaining momentum amid President Donald Trump’s crackdown on nations he sees as undermining US interests.
Still, ASML chief executive officer Christophe Fouquet said the deal’s primary purpose is integrating AI within the company rather than building a European champion. The investment and ASML’s involvement with the company will give the chip equipment maker a way to incorporate Mistral’s generative AI services in its machinery and operations.
“We want to flood the entire organisation of ASML with AI,” Fouquet said in an interview.
Reuters first reported the investment on Sunday.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The Dutch company is the sole producer of cutting-edge lithography equipment used by semiconductor companies to make advanced chips for products like Apple’s iPhones and Nvidia’s AI accelerators. ASML has not backed an AI firm before and rarely ventures into startup investing.
For Mistral, the deal provides it with a major injection in a costly, competitive market. Founded in early 2023, Mistral has pitched itself as an alternative to Silicon Valley stalwarts such as OpenAI and Google. The startup is a centrepiece of French President Emmanuel Macron’s strategy to turn the nation into a serious competitor in AI.
Arthur Mensch, Mistral’s CEO, said pairing with a European company “was the cherry on the cake” of the deal. “It’s a good story of two European champions working together,” he said. “We would love to see it more.”
Mensch said the company’s three co-founders and employees remain majority shareholders. Joining ASML in the financing round are several prior investors, including Nvidia and US venture capital firms Andreessen Horowitz, General Catalyst and DST Global.
Roger Dassen, ASML’s chief financial officer, will join Mistral’s board.
While Mistral has announced deals with large European companies, including BNP Paribas and Stellantis NV, it hasn’t disclosed a major US client, despite a push into the market.
It’s also struggled to keep up with American rivals. US peers like OpenAI, Anthropic and Elon Musk’s xAI have raised substantially more money. OpenAI’s valuation reached US$500 billion in a recent round of secondary share sales.
Recently, Mistral has emphasised how its open-source models can be tailored for enterprises, offering more flexibility than competitors. Mensch said the ASML partnership will build on Mistral’s focus on particular industries like manufacturing.
Fouquet said Mistral’s tech would be used to improve the performance of the software and scanning tech in its machines. “We’re not trying to do everything ourselves,” Fouquet said, when asked whether ASML would rule out taking over Mistral. “We’re not trying to vertically integrate every single competence.” He said ASML had looked at other AI companies as potential partners, but did not name them.
Generative AI can make ASML’s machines more precise by collecting and analysing more data from their performance, analysts at New Street Research said in a note on Monday. “An investment of less than 1 per cent of ASML’s market cap would be largely justified to access state-of-the-art IP and skills in that domain,” analysts Pierre Ferragu and Rolf Bulk said.
Citigroup analysts also called the partnership a “long-term positive” in a note on Tuesday. “ASML will further its product development through the use of AI models, aiming to bring solutions to market faster and with higher performance,” analysts including Andrew Gardiner said.
Unlike other companies in the semiconductor industry, such as Nvidia and Intel, ASML has largely stayed out of venture investing. It backed a Dutch tech fund and some local startups, including integrated circuit developer Smart Photonics, in a €100 million round. More typically, it buys stakes in elements of its supply chain, such as a holding in optics company Carl Zeiss SMT to help advance lasers used in its machines. BLOOMBERG
