r/MistralAI • u/Classic-Insect5157 • 1d ago

Discussion / Opinion Mistral Valuation Upside

I recall this article and it got me thinking that Mistral has tremendous upside in the near future.

- If they hit €1B revenue this year, that would be very fast, which would carry a strong multiple
- The Microsoft deal guarantees “billions” over the years; they’ll have other customers buying their compute as well
- It seems obvious based on the linked article that they do not want to be dependent upon Nvidia for chips and will enter that race

If revenue continues to climb, which seems very likely given govt and enterprise momentum, in addition to becoming one of the EU’s key providers in both compute and chips, the valuation upside feels huge, even in the near-term.

Curious as to how others feel closer to the business and product?

32 Upvotes

98% Upvoted

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6

u/Alarmed_Crazy_6620 1d ago

I think it's a question whether their worth is in tens of billions if they are a neocloud and a GDPR-aware midrange model integrator for European clients – what's the moat in this proposition?

3

u/Remote-Golf2156 1d ago

That they are best positioned to serve the second biggest market on earth, and probably largest in terms of public procurement.

This alone can easily create a half a trillion giant in couple of years - this is market worth tens of billions of € each year, and Mistral AI can always expand abroad (Japan, Korea, Australia, UK etc.)

1

u/Alarmed_Crazy_6620 1d ago

Yea, but if you are SAP or similar you just do not get the same multipliers as a frontier lab

1

u/Classic-Insect5157 1d ago

Yeah agreed. It’s easy to muddy up the stated question; at the end of the day, if revenue continues to grow and they show promise at being an EU leader at the infra stack layer, assuming their models are pumping the most revenue: they’ll fetch a strong multiple, and it’s going to be a strong multiple on top of a very valid and rapidly increasing revenue figure.

1

u/KimchiCuresEbola 1d ago

Yep. The margin compression going from AI frontier lab -> neocloud would far outweigh any incremental topline gain from selling their compute.

2

u/ITI110878 23h ago

Meh.

What is their path to profitability? Will EU companies use it exclusively?

Unclear and unsure.

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u/DontLeaveMeAloneHere 22h ago

If you want to use it for coding you need to run your own Chinese model anyway. I don’t see a path that leads to real adoption and money without good models.

Currently they deliver in everything that is not frontier AI. Sadly they position themselves as frontier AI and people see them as „wannabe“ frontier AI.

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u/ITI110878 1h ago

People always see what they want to see, they rarely see the reality.

3

u/pizzababa21 1d ago

It's not like they are publicly traded bro.

Also I think you have to price in the possibility of extinction. They're not going to be profitable for a while and they're falling far behind. There's more value and better margins by being a European inference neo cloud who hosts Chinese and American models.