When it comes to strategic investments in artificial intelligence, Microsoft Corp. is making a lot of bets in a lot of spaces.
The tech company's latest AI partnership and investment is with Mistral AI SAS, a provider of open-source large language models that was founded 10 months ago. Microsoft invested about $16.2 million in the company valued at $2 billion in its latest funding round. Under the agreement, Mistral will use Microsoft's Azure infrastructure to develop the next generation of large language models.
"We have moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we are winning new customers and helping drive new benefits and productivity gains," Microsoft CEO Satya Nadella said in the company's most recent earnings call.
The news comes somewhat as a surprise as Mistral is a competitor of ChatGPT owner OpenAI LLC, in which Microsoft has reportedly invested a total of about $13 billion.
Microsoft and its venture arm M12 have ramped up strategic investments in AI companies in the past 15 months. In 2023, nearly half of Microsoft's strategic investments were in AI companies, up from a fifth in 2022, according to data from S&P Global Market Intelligence. Outside of AI, Microsoft has also invested in energy and climate tech, in line with its efforts around sustainability.
All told, Microsoft has invested in about 27 AI startups since 2022, betting on AI infrastructure and tooling vendors such as data intelligence platform Databricks Inc., AI compute platform d-Matrix Corp. and AI chip-maker Syntiant Corp.
It also participated in funding rounds for hardware-makers such as Humane Inc, the maker of an AI pin powered by ChatGPT; and Figure AI Inc., which aims to create a general-purpose humanoid robot. Other targets have included healthcare companies such as Paige.AI Inc., which aims to use AI to improve cancer diagnostics, and Flywheel Exchange Inc., a medical image analysis company.
Microsoft's investments often come with partnership expectations. Mistral Large, Mistral's latest large language model, will be available first on Azure. Open AI's ChatGPT is powering Microsoft's Copilot, while Engineer.ai Corp.'s developer assistant, Natasha, is on track to be integrated with Teams.
Large tech companies have been competing to make investments and strike partnerships with hot AI startups, and Microsoft's fellow hyperscalers Alphabet Inc. and Amazon.com Inc. have been very active. Among large tech companies, chip designer NVIDIA Corp. made the most AI investments by far, with 34 in 2023.