Mistral takes next steps to challenge OpenAI.

Mistral AI, the star-studded European startup, is shaking up the AI world. After their initial torrent releases, the company is onto serious stuff with a new language model, Mistral Large. That’s not it, it’s also launching a chat platform and bringing Microsoft on board as a partner.

What’s going on here?

Mistral AI drops cutting-edge AI models, and partners with Microsoft for infrastructure and distribution. Translation: they're about to get big(ger).

What does this mean?

Mistral claims that Large is the second-best AI model available via an API after GPT-4 and benchmarks follow. Large beats GPT 3.5, Gemini Pro 1.0 but they haven’t mentioned Gemini Ultra which is likely to be better than Large (Gemini Ultra is not available via API).

Mistral Large is a multilingual model. Apart from English, it handles French, Spanish, German, and Italian like a native. For developers, this model also comes with native function calling and JSON mode. As for pricing, it’s roughly 20% cheaper than GPT-4.

For bringing this model to users, Mistral is running two playbooks: a) Launch its own chat interface: Le Chat and b) Partner with Microsoft and provide Mistral on Azure.

On Le chat, you can chat with three models from Mistral: Large, Next and Small. Next is their prototype model with short and chatty responses. Mistral Small is an updated zippier package that outperforms Mistral’s older model Mixtral. Le Chat is in beta, and can’t browse the web yet.

The partnership with Microsoft is not just providing models on the Azure cloud. FT reports that Microsoft is investing some $$s to get a minor stake in this 10-month-old startup.

Why should I care?

Let’s get real here, if you are an average AI user (or developer), Mistral Large is not changing how you interact with AI. It’s at a similar pricing as GPT-4 but performs slightly worse. What it’s signalling is that the business of making foundational AI models is shifting from having only Open AI as an option to having other players in the game (who are catching up fast).

Also, Mistral is the only European startup playing in the big leagues with OpenAI, Google, Anthropic and others. Although a bit annoyed that their open-source approach and quirky releases that made them stand out are somewhat fading with this release. Hope they stick to their guns.