Samsung is engaged in discussions to invest several hundred million euros in the French artificial intelligence start-up Mistral, potentially strengthening the company’s position as a challenger to dominant U.S. technology firms. The South Korean conglomerate, recognized as the world’s largest manufacturer of memory chips, is considering a stake worth approximately €1 billion in a fundraising round that could value Mistral around €20 billion, according to sources familiar with the matter.

This potential investment follows Samsung’s earlier backing of Mistral through its venture capital division. The talks exemplify a broader trend in the AI industry, where developers are seeking close partnerships with semiconductor suppliers amid rapidly increasing demand that exceeds available computing resources.

Mistral aims to leverage growing interest from European and Asian companies and governments looking for alternatives to leading U.S.-based AI models. This surge in interest has intensified since the U.S. government imposed export controls last month restricting foreign access to Anthropic’s latest Mythos and Fable AI models. These restrictions have fueled a desire for more "sovereign" AI capabilities. Mistral has emphasized from the outset its focus on open AI models that can be customized and fully controlled by customers, allowing clients to avoid dependence on any single company or government to maintain access.

The French company is currently seeking to raise several billion euros in this new funding round. This follows a valuation of €12 billion less than a year ago in a deal led by Dutch semiconductor equipment maker ASML. Sources indicate Swedish investor EQT’s Scaleup Europe Fund is also in discussions to participate in the financing. The fund, which is backed by the European Union and managed by EQT, is reportedly targeting over €5 billion to support promising European companies in fields such as artificial intelligence, attracting investors including Novo Holdings and Santander. Representatives from Mistral, Samsung, and EQT declined to comment on the ongoing talks, which remain subject to change and have not yet been finalized.

Mistral recently raised €1.7 billion in September, primarily from ASML, which is integrating Mistral’s AI models to accelerate its chip manufacturing equipment production. Earlier this year, Mistral secured $830 million through debt financing aimed at supporting the development of Nvidia-powered data centers across Europe.

The company faces increasing competition from China, where firms like Moonshot are closing the performance gap with leading U.S. AI systems through models such as Kimi. Nevertheless, Mistral CEO Arthur Mensch projected in February that the firm’s annual recurring revenue would surpass $1 billion in 2024, driven by efforts to expand its enterprise customer base.