Microsoft Partners with Parisian Startup Mistral AI to Expand Azure's AI Offerings

Microsoft Partners with Parisian Startup Mistral AI to Expand Azure’s AI Offerings

Microsoft is splashing more cash to bolster its artificial intelligence offerings. This time, the tech giant is teaming up with Parisian startup Mistral AI.

On Monday, Microsoft announced it struck a multi-year partnership to make Mistral’s AI models available on its Azure cloud platform. Microsoft will also take a minority stake in the three-year-old startup.

The deal shows Microsoft racing to diversify its AI partnerships beyond its crown jewel, OpenAI. Microsoft has already pumped billions into OpenAI, maker of ChatGPT. But regulators are probing that relationship. Making big bets on alternative AI firms helps future-proof Microsoft’s cloud platform.

Mistral is led by AI veterans from Meta and Google’s DeepMind. It develops custom natural language AI that can understand text, write original passages, and even explain its reasoning—much like ChatGPT.

Mistral’s flagship tech is called Mistral Large. For now, it will live exclusively on Azure under the new partnership. But Mistral plans to distribute its AI across rivals Amazon and Google’s clouds too.

Still, Microsoft scored a first-mover advantage by locking in Mistral integration and snagging an ownership stake. The cash infusion can supercharge Mistral’s model development while exposing it to Microsoft’s enormous customer base.

The deal mirrors the strategy that helped Azure erase AWS’ early cloud lead: partner deeply with top startups doing cutting-edge work. Microsoft is now simply applying that playbook to the next epochal tech shift toward artificial intelligence.

In both OpenAI and Mistral, Microsoft has backed alternative horses that can storm out ahead of any AI disruption. Even if Mistral doesn’t reach ChatGPT-level fame, its technology still expands Azure’s capabilities.

Of course, we don’t know the exact size of Microsoft’s investment. But the firm feels it’s deep enough that regulators may soon come knocking with more questions. Clearly, Microsoft believes Mistral’s AI is poised for big things.