Microsoft’s multi-year deal with French AI company Mistral indicates that the company wants longevity in the space.
The company invested €2 billion ($2.1 billion) in Mistral and announced that it will bring Mistral’s newest AI module, Mistral Large, to Azure. But the investment in Mistral, a major developer of open-source AI modules, doesn’t mean Microsoft has lost faith in its first AI baby, OpenAI. Instead, Microsoft plans to build Azure as a model garden and establish a foothold in Europe.
Arun Chandrasekaran, an analyst at Gartner, says: the edge This case emphasizes the business of AI managed services, in which Azure can play a role.
“Even before the announcement of Mistral, Microsoft has been talking about creating a model garden, so it’s not surprising that they will also have models of Mistral,” he says. He adds that working with Mistral, which Popular among developers, Microsoft allows the breadth of options that Azure offers.
Microsoft is not the only tech company that offers other models to its customers. Many cloud providers, such as AWS and Google, do this through managed services, providing access to modules and other services to make them easier to use. Therefore, to compete, cloud providers try to offer the most demanding models first. Microsoft has an exclusive deal with Mistral to deliver Mistral Large to customers making Azure an interesting prospect for those building with other Mistral models.
Azure has offered modules for a while, but Microsoft has become so tightly tied to OpenAI that it’s easy for people to forget that the company does more than just GPT. Microsoft, of course, is OpenAI’s biggest investor. It put $10 billion into the company and helped it grow to great heights by throwing a stable of consumer and business products behind GPT.
Nothing in Microsoft’s announcement about Mistral suggests that the company plans to ditch its two children. OpenAI remains the favorite child because its models power Microsoft’s flagship AI product, Copilot.
“Unlike the OpenAI investment, where they were very public about it, the Mistral deal is a little more secretive. The investment in OpenAI is even more strategic because they don’t bring Mistral into their apps but to train models on Azure,” Chandrasekaran says.
European element
However, becoming a minority investor in Microsoft Mistral is not just a move to expand its Azure model garden. It also allows the company to become a player in the European AI space by buying into a company that already has a presence in the region.
Mistral is, of course, French. After the EU’s AI Act was passed, French President Emmanuel Macron blasted the new rules, saying it stifled innovation by companies like Mistral. A large part of the AI Act deals with managing general-purpose AI, with major language models such as Mistral, OpenAI’s GPT, Meta’s Llama 2, and Google’s Gemini all falling under the umbrella. Although this process is not technically in place yet, it helps if companies start preparing a strict policy framework around AI models. Already, EU regulators are analyzing the deal for potential antitrust issues.
Now that Microsoft has a stake in a European company, it can start making plans before applying with a company already registered in the region. Microsoft also hinted at what those plans could entail, saying it would bring opportunities for global expansion and allow them to “explore collaboration around specific models of training objectives for select customers, including European public sector workloads.” .”