(Bloomberg) -- Mistral AI has raised €600 million ($644 million) from a slew of financial and tech investors as the French artificial intelligence startup starts to take on bigger global players such as OpenAI. 

The investment gives the company, formed in early 2023, a €5.8 billion valuation, according to a person familiar with the terms, who asked not to be identified discussing private information.

Venture capital firm General Catalyst led the round, which included a number of prior investors such as Andreessen Horowitz and Lightspeed Venture Partners, the company said in a statement on Tuesday. Corporate backers including Nvidia Corp., Samsung Venture Investment Corp., Cisco Systems Inc. and International Business Machines Corp. also joined. 

Mistral is France’s prized AI champion, and it’s attracted more than €1 billion in investment in the last year, and announced partnerships with Microsoft Corp. and other US firms to distribute its models. Chief Executive Officer Arthur Mensch said in the statement that the newest financing “guarantees the company’s continued independence, which remains fully under the founders’ control.” 

The startup primarily releases open-source AI models, betting that software developers and companies will prefer to use these tweakable systems over closed-source options from OpenAI and Google. Mistral leaders have argued that the company can run these models more cheaply than rivals. Still, the European company lags behind its better-funded US rivals.

Mistral recently hired its first general manager for the US, an attempt to cut into the crowded market for enterprise sales of generative AI services. In its statement, Mistral said its open-source models have been downloaded more than 27 million times.

France has become a European hotspot for AI development, tapping investor interest and local talent from tech companies such as Google’s DeepMind, who have gone on to found their own startups. 

H, another French AI startup, raised $220 million in initial financing from billionaires — including Bernard Arnault, Eric Schmidt, Xavier Niel and Yuri Milner — as well as venture capital and other investors. AI model developer LightOn, is considering raising new equity or holding an initial public offering as soon as this year to take advantage on booming investor interest, people familiar with the matter had said. 

(Updates with details on Mistral valuation and additional background from the second paragraph)

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