Mistral AI is nearing the completion of a significant funding round, anticipated to be around $487 million. This round includes contributions from notable investors such as American chipmaker giant Nvidia and cloud company Salesforce, potentially valuing the company, a competitor of OpenAI, at around $2 billion.

This information comes from sources with inside information about the financial deal, according to Bloomberg. The sources chose to remain anonymous as the matter is still confidential. It’s important to note that some aspects of this deal are still being finalized and are subject to change.

Other renowned names such as General Catalyst, Lightspeed Venture Partners, Bpifrance, and several others also participated in the round.

The funding round is led by Andreessen Horowitz, with plans to invest over €325 million in equity. This leading venture capital firm is reportedly considering an investment of €200 million. Additionally, Nvidia and Salesforce are set to provide around €120 million in the form of convertible debt.

Internal documents reviewed by Bloomberg reveal that Mistral’s recent financial deal involves the three co-founders of the startup consenting to sell equity stakes exceeding €1 million each.

Additionally, three key figures within Mistral, including the company’s chief advisor and former French minister Cedric O, are preparing to divest their shares. Cedric O, in particular, is planning to sell close to €1 million worth of equity, according to the term sheet.

Mistral’s impressive $2 billion valuation, despite being less than a year old, reflects the tech industry’s robust enthusiasm for the potential and profitability of artificial intelligence companies.

The company is known for its open-source software that drives chatbots and other generative AI technologies similar to OpenAI, Google, and many other rivals. This is a sector known for its intensive computing demands, which are often fulfilled by Nvidia’s top-notch AI GPUs, including the H100 Tensor Core GPU.

However, when compared to OpenAI and other tech giants, Mistral positions itself as a more cost-effective and efficient alternative.

Gaining prominence as a top AI startup in Europe, Mistral was founded by former researchers from Alphabet’s DeepMind and Meta. These founders have backgrounds in creating extensive language models, similar to those developed by Sam Altman’s OpenAI.

Demonstrating significant growth, Mistral achieved an impressive initial funding of $113 million in June, marking a notable achievement for a European technology startup.