ASML Invests 13 Billion Euros in Mistral AI, Boosting European Tech Sovereignty

ASML, a Dutch semiconductor equipment manufacturer, has made a rare investment of 13 billion euros (approximately 15 billion dollars) in Mistral AI, a French artificial intelligence startup. This move is significant for ASML, as it marks a departure from its usual investment strategy and provides substantial support to one of Europe's most influential AI startups.

Through this investment, ASML will hold an 11% stake in Mistral, becoming its largest shareholder. Mistral specializes in developing AI models and chatbots. The 13 billion euro investment is part of Mistral's 17 billion euro funding round, which values the company at approximately 117 billion euros, making it one of Europe's highest-valued private companies.

Mistral is one of the few European companies that can compete with AI giants like OpenAI. Its alliance with ASML, one of Europe's largest and most powerful tech companies, provides a strong backing. This collaboration is seen as a victory for Europe's "sovereign tech movement," which advocates for reducing dependence on Silicon Valley tech tools. This movement has gained momentum, especially in the context of the Donald Trump's policies that targeted countries he deemed harmful to American interests.

However, the chief executive of ASML emphasized that the core purpose of this deal is to integrate AI technology within ASML's operations, rather than simply creating a European benchmark company. By investing in and deeply engaging with Mistral's development, ASML aims to integrate Mistral's generative AI services into its own devices and operational processes.

"We want AI to permeate the entire organizational structure of ASML," the chief executive said in an interview.

ASML is the only company globally capable of producing cutting-edge lithography equipment, essential for semiconductor companies to manufacture high-end chips used in products like Apple's iPhone and NVIDIA's AI accelerators. Prior to this, ASML had never invested in an AI company and rarely ventured into startup investments.

For Mistral, this collaboration is a significant financial boost in the high-cost, competitive AI market. Founded in early 2023, Mistral has positioned itself as an alternative to Silicon Valley giants like OpenAI and Google, and is a key player in the French president's strategy to make France a major competitor in the AI field.

The chief executive of Mistral highlighted the importance of collaborating with a European company, calling it an "icing on the cake." "This is an example of two European flagship companies working together," he said, expressing hope for more such collaborations in the future.

Despite announcing partnerships with major European companies like BNP Paribas and Stellantis, Mistral has not disclosed any significant U.S. clients, even as it actively explores the American market. Mistral faces stiff competition from U.S. counterparts like OpenAI, Anthropic, and xAI, which have raised far more funds. In recent secondary market transactions, OpenAI's valuation reached 500 billion dollars, more than 40 times that of Mistral.

Recently, Mistral has emphasized the advantages of its open-source model, which can be customized to meet enterprise needs, offering greater flexibility compared to competitors. The collaboration with ASML is expected to further enhance Mistral's focus on specific industries like manufacturing.

The chief executive of ASML noted that Mistral's technology will be used to enhance the software and scanning capabilities of ASML's equipment. "We are not trying to do everything ourselves," he said. "We prefer to partner with the best in the industry." The chief executive revealed that ASML had considered other potential AI partners but did not name any specific companies.

Prior to the announcement of the collaboration, some analysts were puzzled by the logic behind the deal. One analyst suggested that the investment in Mistral might align with ASML's nascent strategy to support local startups, but added that the direct benefits to ASML's business would be limited.

Unlike other semiconductor companies such as NVIDIA and Intel, ASML has had limited involvement in venture capital. The company has participated in a Dutch tech fund and invested 100 million euros in local startups like Smart Photonics. Typically, ASML's investments are focused on the supply chain, such as holding shares in the optical company Carl Zeiss SMT to support the development of laser technology needed for its equipment.

The chief financial officer of ASML will join Mistral's board of directors. The three co-founders and employees of Mistral will retain the majority of the company's shares. In addition to ASML, other investors in this funding round include NVIDIA, the U.S. venture capital firm Andreessen Horowitz, the Pan-Atlantic Investment Group, and DST Global.