Apple is reportedly contemplating a significant move to bolster its artificial intelligence strength through the acquisition of Mistral, France’s top AI startup. The Cupertino technology company is seriously considering the acquisition of the European firm as it attempts to revive its ailing AI ecosystem, according to Bloomberg’s July 13 report.
The proposed acquisition is timely for Apple, which has been under increasing criticism for its artificial intelligence-based products in recent years. The company has been criticized by customers for its AI services, and the technology giant has trailed Google and Microsoft in the fast-changing AI space.
Mistral AI: Europe’s Crown Jewel and Potential Apple Acquisition Target
Mistral is currently Europe’s highest-valued AI startup, worth €5.8 billion (about $6.2 billion). The French startup has an impressive fundraising history, having raised €1.1 billion (about $1.2 billion) over seven funding rounds since its founding.
The company’s latest significant funding milestone was in June last year when it raised €600 million (or roughly $660 million) in its Series B round. This was led by high-end venture capital houses DST Global and General Catalyst, among others. Bloomberg also reported that Mistral is negotiating to raise as much as $1 billion from new investors, which reflects the high-end investor optimism in the company’s potential.
In addition to equity financing, Mistral is also seeking debt financing and has been negotiating with “hundreds of millions of euros” with multiple lenders. The diversified funding strategy is a demonstration of the company’s growth strategy and financial flexibility.
Mistral has created a splash in the AI community with the introduction of a spectacular range of large and small language models. It has gained specific attention due to its optical character recognition (OCR), and the company has become a point of interest because of it.
The startup’s chatbot, aptly named “Le Chat,” has also won the hearts of users with the speed and accuracy of its replies. Such an effortless interaction has made Mistral a significant name in the European AI market and beyond.
This would not be the first time Apple has gone after AI startups to buy. Executives at the company have discussed internally before acquiring Perplexity, a US AI startup. But talks have slowed, according to reports, with Perplexity executives saying that they have “no knowledge of any current or future M&A discussions.”
AI Struggles of Apple and the Potential Mistral Acquisition
Apple’s push to buy AI firms demonstrates the company’s desperate need to enhance its artificial intelligence efforts. The technology giant has been trying to enhance Siri, its virtual assistant, but development has lagged behind expectations. A major Siri upgrade has been pushed back to 2026, which shows the challenges that Apple is facing in this competitive arena.
Adding to Apple’s AI woes, the Cupertino technology giant recently lost some of its best talent serving in its AI division. Ruoming Pang, a principal engineer and head of Apple’s foundational models team, recently departed. Meta poached him with a package deal worth tens of millions of dollars annually, a testament to the intense competition in poaching AI talent.
Tom Gunter, another high-profile exit, was an eight-year Apple veteran. His peers call him “difficult to replace” for his specialized set of skills, highlighting the magnitude of the talent loss for Apple’s AI development team.
The prospective Mistral acquisition is Apple’s acknowledgement that it requires outside expertise in order to be successful in the AI arena. Through the purchase of a technically proven and well-established company in the market, Apple can possibly speed up its AI development process and improve its product offerings.
While the AI revolution continues to revolutionize the face of technology, Apple’s openness to acquiring strategically reflects its determination to stay competitive. Whether the Mistral acquisition happens or not is to be determined, but it is reflective of Apple’s determination to secure its place in the race for artificial intelligence.
The tech industry will be watching closely to see if this potential acquisition happens and how it can alter the future of both companies in the rapidly expanding AI field.