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Mistral raises €3B

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Re: Mistral raises €3B

#321

Post by pferde »

grim_io wrote: post #227
gman83 wrote: post #122

Earlier quoted context omitted.

No, Europe doesn't have the capital markets required to build the required data centers. Underwriting gigawatt data centers and frontier models demands a fully realized European Capital Markets Union, a single energy regulator with cross-border grid integration, and shared fiscal borrowing power.

There is a big difference in compute requirements between EU and US. EU needs to meet their own demand, the US wants to be the global provider.

No, I think most of the recent huge datacenter buildups are for US AI efforts only in the AI arms race, not to be rented out.

Re: Mistral raises €3B

#322

Post by adventured »

black_puppydog wrote: post #74
matusp wrote: post #59

Earlier quoted context omitted.

This is a bottom feeder mentality. Europe has enough bright people and resources to truly compete in the AI race. There is something wrong when the only selling point is that it's local.

We're regularly getting demonstrations that being at the frontier is no moat at all. "Run open weights locally" was literally on the HN front page a few days ago as a primary concern/competitor for the big US labs. So there's a big and meaningful gap between "not frontier" and "bottom feeder". There's just tons of applications where you don't need "the best" model, especially not tomorrow's best model.

Why hasn't Baidu taken over the world's search market?

What moat does Google have that's so special in search?

You need to spend hundreds of billions of dollars to scale globally in search. And you have to take the market away from Google at the same time. Good luck.

OpenAI and Anthropic are doing that right now in LLMs, hyper scaling to a billion people. Having a billion users you can actually serve is a moat.

When OpenAI is done attaching a full ad model to GPT, they'll be able to serve a billion users profitably globally with zero subscriptions. This is what keeps Google up at night: ~$500 billion in ad revenue up for grabs circa 2030.

Any service with hundreds of millions of users is a lucrative ad business. TikTok, YouTube, Instagram, Facebook, Google, Amazon.

OpenAI's moat, if they get there soon enough, is that they'll be able to lean into a high margin ad business to press down on the market and kill everybody. You won't be able to serve the infrastructure to compete at the cost structure they'll able to subsidize at via the high margin ad business. This is an extraordinarily straight-forward move, and it's comically anti-competitive, and nobody will stop them from doing it. Their mistake is that they're at least two years behind where they should be in advertising.

Anthropic is the one at the most risk from the Chinese models, they have the weaker everyday consumer side. Enterprise won't be supported by an ad model very well.

Re: Mistral raises €3B

#323

Post by matusp »

black_puppydog wrote: post #74
matusp wrote: post #59

Earlier quoted context omitted.

This is a bottom feeder mentality. Europe has enough bright people and resources to truly compete in the AI race. There is something wrong when the only selling point is that it's local.

We're regularly getting demonstrations that being at the frontier is no moat at all. "Run open weights locally" was literally on the HN front page a few days ago as a primary concern/competitor for the big US labs. So there's a big and meaningful gap between "not frontier" and "bottom feeder". There's just tons of applications where you don't need "the best" model, especially not tomorrow's best model.

How much money are Europeans paying to US companies for AI services and how much are Americans paying to EU companies? I don't think it's a good idea to let billions of dollars go to other countries because you couldn't be bothered to build a competitive product.

Re: Mistral raises €3B

#324

Post by bambax »

easytiger wrote: post #253
bambax wrote: post #189

Earlier quoted context omitted.

> I’m sort of surprised that the EU isn’t stepping in to support them. It is! The second largest investor in this round is Scaleup Europe Fund: https://eic.ec.europa.eu/eic-fund/scaleup-europe-fund_en

Do you think that's a good thing?

I don't know. Government funds have a unique way of being often wrong, so this may be the kiss of death. But it is a sign that the EU is helping Mistral.

Re: Mistral raises €3B

#325

Post by lII1lIlI11ll »

simgt wrote: post #256
matusp wrote: post #59

Earlier quoted context omitted.

This is a bottom feeder mentality. Europe has enough bright people and resources to truly compete in the AI race. There is something wrong when the only selling point is that it's local.

We're not in a good position on the supply chain needed. Right now it really means pouring billions on American corps, either by renting the compute or by building it. That would be mostly fine if it were only VC money but it's not.

> We're not in a good position on the supply chain needed. Right now it really means pouring billions on American corps, either by renting the compute or by building it.

You are saying "right now" as if EU is seriously investing into developing its own AI hardware (both training and inference) but I'm not aware of any serious attempts to build such supply chain in EU.

Re: Mistral raises €3B

#326

Post by surgical_fire »

aurareturn wrote: post #309
surgical_fire wrote: post #204

Earlier quoted context omitted.

> They're likely over $80b ARR by now. They'll be at $800b ARR next year at the same rate. And they will be 800 trilion ARR in a couple of years, following that same rate! 8 quadrillion by 2029! > When you are growing so fast, you don't need to make a net profit. You just need to make sure your unit economics are good - which it seems like they are given reports that their gross margins are at 60-70%. If their margin…

If their margins were anywhere near this good, they wouldn't need to raise so much money so often. Why not? They are reinvesting into growth. There isn't a clear winner yet and Anthropic wants to make sure it is one of them. Taking a profit now while letting OpenAI take your marketshare and train better models is not very smart.

Or they bleed money like crazy, and their margins are pretty awful. Which is the correct answer.

Your $200 subscription is a major net loss for them. The vast majority that pays for that would cancel in a heartbeat the moment they had to pay API prices. Which may or may not be profitable, I am not entirely sure. But for the sake of argument, let's assume that it is.

Re: Mistral raises €3B

#327

Post by Tenoke »

tangled wrote: post #96

Europe absolutely needs a home-grown AI lab, especially with Pax Americana looking increasingly shaky. LLMs embody value systems, and American and European values are not the same (yes, there are overlaps, but also key differences). More nefariously, I can also imagine LLMs that silently degrade their reasoning when used in a national security context of a non-US country. So, Mistral may not be competitive with OpenA…

> Europe absolutely needs a home-grown AI lab, especially with Pax Americana looking increasingly shaky.

The only problem (at least in the LLM space) is that you can do more in Europe by just getting the best Chinese Open weights model (do a finetune if you really want) and do more for cheaper than using Mistral.

Re: Mistral raises €3B

#328

Post by Tenoke »

AureliusMA wrote: post #278
easytiger wrote: post #253

Earlier quoted context omitted.

Do you think that's a good thing?

European money invested in a European company ought to be a good thing, don’t you think?

It's possible to be a waste of European money that could be better used elsewhere, though. I think the same about LeCun's company sucking up the little funding here.

Re: Mistral raises €3B

#329

Post by adventured »

Slartie wrote: post #67
HenrikPontoppid wrote: post #47

Earlier quoted context omitted.

When it comes to what really matters, they're far behind and probably will not catch up. It is my conviction that in this space, if you're not the best in the world, you're losing. Everyone is fundamentally selling the same thing, so if you don't have the most intelligent or cheapest model in the world, you're losing. Sure, Mistral has a "Made in Europe" edge, but any open-weight self-hosted chinese model might as we…

Well, then Samsung Electronics appears to be dumb for leading this investment round? They probably only do it because they're European...oh, wait... > so if you don't have the most intelligent or cheapest model in the world, you're losing So how does this match up to the fact that there is currently OpenAI and Anthropic, both raking in money? They can't both have the smartest model at the same time, can they? And all…

Samsung is now essentially tied for being the world's most profitable company with Nvidia ($62b operating profit last quarter, vs $63b for Nvidia). They're drowning in cash. They're doing the same thing Nvidia has been doing: distributing the money to their business partners, to try to drive business growth faster (and or to keep it all propped up).

Re: Mistral raises €3B

#330

Post by ta20240528 »

wraptile wrote: post #313
TheJCDenton wrote: post #135

Earlier quoted context omitted.

When Apple is not racing for the frontier it's a strategy, but when it's Mistral it's a mistake. The two companies have read the market the same. It's always very dangerous for first movers and their investors, and the commodification of intelligence seems even more likely each time a chinese open model release. It's less exciting to do business that way, but if you're building to stand the test of time, it's wiser t…

Apple _owns_ computers in people's pockets. There are very few businesses that can match this value. What does Mistral own? A head start at best. For the record I like Mistral and hope they succeed, but you're comparing apples to oranges.

"What does Mistral own?"

Independence from the USA's CLOUD Act, secret FISA courts, and ICC-style disabling of important services.*

*…and the Chinese equivalents.

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