By Sam Schechner

PARIS -- Trans-Atlantic tensions are boosting demand in Europe for homegrown artificial-intelligence tools, helping the continent's most prominent AI developer finance its efforts to keep up with global rivals.

European companies and governments increasingly want AI tools that aren't dependent on American tech behemoths, Arthur Mensch, chief executive of France's Mistral AI, said in an interview Wednesday. The trend is accelerating the adoption of Mistral's AI models, putting the company on pace to earn revenue of more than $100 million a year, Mensch said.

Mistral now plans to lean into that demand by building its own 40-megawatt AI data center, powered by 18,000 cutting-edge Nvidia chips, some 20 miles south of Paris, Mensch said. It plans to expand to 100 megawatts in the next year and a half.

A big goal of the data center is to give European customers a way to tap in to Mistral's AI products without any dependence on the U.S. Vice President JD Vance raised anxiety here in February when he said the U.S. was winning the race to build the best AI-training chips and AI algorithms, and intended " to keep it that way."

"It tremendously affected our demand because European leaders just don't want to be talked to that way," Mensch said of Vance's statement. Mensch said that using American companies' AI gives the U.S. leverage over Europe, which the region is trying to reduce.

Paris-based Mistral has developed generative AI models that compete with those from American companies such as OpenAI and Google, or China's DeepSeek. Last year, the two-year-old company, which now has about 250 employees, raised more than $600 million at a roughly $6 billion valuation. While the company isn't currently seeking to raise further funds, it is considering tapping investors for $1 billion or more later this year, according to people familiar with its plans.

Mistral earlier this week released two new reasoning models that it says outperform DeepSeek and are on par with some models from U.S. companies such as OpenAI for some capabilities. The new models were built using a process known as reinforcement learning. The process involves models learning by solving problems and being rewarded for better answers, rather than being given solutions ahead of time.

Europe is projected to spend $144 billion on AI in 2028, according to estimates by IDC. But Mistral has global ambitions with offices in the U.S. and Singapore, and Mensch says roughly half the company's revenue comes from outside Europe, including deals with companies such as Cisco.

"That has always been part of the project that we started: to show that European AI could compete," Mensch said Wednesday.

Mistral promotes itself as giving enterprise customers more control than some big American labs over how they use its products and where they are deployed. That is in part because the company releases versions of its AI tools in open source, allowing others to adapt them for different uses.

Other companies such as Meta Platforms and DeepSeek also release models in open source -- but neither is based in Europe. And Meta isn't focused on selling its AI models to the enterprise market. Mensch said many customers now also want Mistral to supply its own hardware too -- a revenue source that underpins some of its new deals with big companies.

Geopolitics has made that sell stronger. The simmering trans-Atlantic trade war, combined with concerns about the security of Chinese AI models, has helped push governments and businesses in Europe to seek independent AI infrastructure, sometimes called sovereign AI.

France has promoted itself as a destination for AI, signing deals with the United Arab Emirates and others to build huge data centers in the country powered by nuclear energy.

Mistral's deal to use Nvidia chips in its data center was cooked up in part with support from French President Emmanuel Macron, Nvidia CEO Jensen Huang said at a tech conference in Paris on Wednesday.

Speaking at a joint appearance with Macron and Mensch, Huang said the French president had met with the chiefs of both tech companies to discuss the project. Macron also helped seal the deal by calling large French companies to encourage them to sign agreements to use Mistral's new data center, Huang said.

"This is our fight for sovereignty, for strategic autonomy," Macron said at the event.

Write to Sam Schechner at Sam.Schechner@wsj.com

(END) Dow Jones Newswires

June 11, 2025 14:11 ET (18:11 GMT)

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