Microsoft’s Cloud Partnership With Mistral AI to Be Scrunitized By EU Commission

Microsoft’s new strategic partnership with Mistral AI, a French startup working on generative AI technology, could face scrutiny from the European Union. The EU is already investigating Microsoft’s partnership with OpenAI, and this new multi-year investment in Mistral AI reportedly caught EU regulators by surprise.

It wasn’t entirely clear in the press release Microsoft published yesterday, but its multi-year partnership with Mistral AI will see the company invest €15 million ($16.3 million) in the AI startup. A spokesperson from the European Commission told Bloomberg today that after receiving a copy of the agreement between the two companies, the EU regulator will now be analyzing it, opening the door to an in-depth investigation.

The Commission is already looking into Microsoft’s relationship with OpenAI to find out if it could threaten competition in the generative AI space. More precisely, the EU investigation will determine if the Redmond giant is currently enjoying all of the benefits of an acquisition (the company has a perpetual license to all OpenAI IP) without actually owning the ChatGPT maker.

Regarding Microsoft’s investment in Mistral AI, a Microsoft spokesperson told Reuters that the company’s €15 million investment would be converted into equity in the company’s next funding round. Mistral AI was valued at €2 billion following a last funding round in December.

Mistral AI was founded in April 2023, and the French startup is still relatively unknown. Thanks to its new partnership with Microsoft, Mistral Large, the company’s flagship commercial model, will be available in the Azure AI Studio and Azure Machine Learning model catalog. Mistral AI will also be using Microsoft’s Azure cloud to accelerate the development of its AI models.