Mistral AI is set to secure another $487 million in funding.

The founders of Mistral have agreed to sell their shares, with each person selling over 1 million euros worth of shares.

After securing the highest seed funding ever for an AI startup, Mistral AI is set to raise approximately 450 million euros (487 million dollars) from investors including NVIDIA and Salesforce. Sources say this funding round values Mistral at around 2 billion dollars.

This financial arrangement includes over 325 million euros in equity, led by investor Andreessen Horowitz, who is currently discussing injecting an additional 200 million euros into the funding pool. NVIDIA and Salesforce plan to invest 120 million euros in the form of convertible bonds, with some details still subject to adjustment.

The founders of Mistral have agreed to sell their shares, with each person selling over 1 million euros as part of the deal. Other key insiders, including former French Minister Cedric O, who serves as the company's chief advisor, plan to sell shares, with Cedric O expected to sell nearly 1 million euros worth of shares.

Mistral, which was founded less than a year ago, has already reached a valuation of 2 billion dollars, highlighting the widespread optimism in the tech industry regarding the potential and profitability of AI companies.

Mistral focuses on open-source software for chatbots and other generative AI tools, positioning itself as a more cost-effective alternative to its American counterparts. In September, the startup released a 7 billion parameter model that outperformed Lama 2 13B in all benchmark tests and surpassed Lama 1 34B in several benchmark tests.

However, Mistral is not solely taking the open-source route. The team announced that they are concurrently developing a commercial product optimized for proprietary data and private cloud deployments. "These models will be distributed as white-box solutions, making weights and code sources available. We are actively developing hosted solutions and enterprise-specific deployments."

The founders of Mistral AI are Arthus Mensch from DeepMind, as well as Guillaume Lample and Timothée Lacroix from Meta AI. Lample is one of the core team members behind the Meta AI LLaMA model, which has been at the forefront of open-source.