PARIS: French artificial intelligence company Mistral has raised €3 billion ($3.5 billion) at a valuation of roughly €21 billion ($24 billion), marking the largest equity funding round for a privately held European technology firm, the three-year-old startup said Tuesday.

The funding round was jointly led by existing investor PSG Equity, along with first-time backers Samsung Electronics of South Korea and the EU-backed Scaleup Europe Fund, according to the company.

The raise positions Mistral as Europe’s second-most-valuable private technology group and its fastest-growing company, Chief Financial Officer Johan Bergqvist told Reuters.

Bergqvist said the capital would be used to power Mistral’s models and invest in so-called frontier research as the company works to compete with larger U.S. rivals.

Mistral is widely viewed as Europe’s strongest contender to develop a leading AI company, though it remains significantly smaller than U.S. competitors such as Anthropic, valued at $965 billion, and OpenAI, valued at $852 billion. Both companies are planning public listings this year.

When asked about a potential initial public offering for Mistral, Bergqvist said it remained “always of course an optionality for us going forward” but that timing was “still up in the air.” He added that the company was not currently engaged in any discussions regarding an IPO.

TECH SOVEREIGNTY AND GLOBAL EXPANSION

The push for technological independence has gained urgency in Europe, highlighted in June by a U.S. decision to restrict foreign access to two advanced models developed by Anthropic.

“The fact that the EU or Europe have to have their own kind of AI provider in the game is important,” Bergqvist said, without directly referencing Anthropic. “We have seen in the past that there is politics involved in the access of these solutions, and it’s important that you make sure that you maintain access and do not compromise your kind of supply chain.”

Mistral develops “open” models that allow its more than 125 customers to download and customize the software on their own servers. Bergqvist said the company is on track to reach $1 billion in annual recurring revenue by the end of the year.

He added that Mistral’s client base is becoming more geographically diverse, with notable growth in Asia and North America.

Microsoft, which agreed in July to invest billions of dollars in Mistral’s computing infrastructure in Europe, did not participate in the latest funding round, Bergqvist said.