> But man, as a business owner in EU, this would just make me not want to build an AI startup in EU
Like, purely on the basis that MS might not be allowed to take you over?
TBH I'd assume the FTC would at least be asking questions here, too. EC and FTC thinking on competition is generally not all _that_ different, but the EC tends to be quicker to act these days (this was not always the case; the FTC was very much out in front on Intel and Internet Explorer back in the day).
You don't own what you can't sell. Any asset value will be massively reduced if its untransferable.
Mistral isn't exactly some decade-long state funded national champion. Its a 1 year old startup whose core staff all come from American tech companies. With 0 revenue and minimal market share, there's like no conceivable metric in traditional antitrust theory to block this. Yet the EU prevents it from taking foreign investment all the same.
Look at TSMC in comparison. It IS the national champion of Taiwan, yet its majority foreign owned, doesn't stop it from underpinning the Taiwan economy and spawning massive ecosystems in its local areas.. Taiwan's government understands its place in the international economy, so prefers to cooperate and trust its international partners.
> If a Chinese company with massive government contracts had invested in OpenAI there is no way that the US would not start an investigation
Sure, but if a European did we wouldn't.
So if you start in America, you can access both continents. If you start in China, you can access Europe and Asia. If you start in Europe, you're limited to one.
Granted, this is just a proble. But if it amounts to something, it's an asymmetrically chilling move.
Time will be the ultimate judge but Mistral's Co-founder/CEO is still committing to be a leading provider of open weight models [1]:
> Clarifying a couple of things since we’re reading creative interpretations of our latest announcements:
- We’re still committed to leading open-weight models! We ask for a little patience, 1.5k H100s only got us that far.
- We have a reselling agreement with Microsoft, that we’re very excited about. Alongside similar partnerships, it will accelerate our growth.
- Microsoft invested in a small convertible note alongside many other companies, as a distribution partner. We are an independent European company with global ambitions, that part is not changing either.
> We’re seeing some interest for Le Chat and Mistral Large, on both la Plateforme and Azure, and we’ll be iterating fast!
Statements like these are only a momentary snapshot. As soon as sufficiently money is at stake the board might change their tune overnight. The whole Altman-fired-from-OpenAI-then-reinstated drama should be warning enough.
The current lack of anti-monopoly enforcement and corporate oversight in the US is a race to the bottom. Should the rest of the world compete by letting corporations run amok, acquire all competition and build monopolies? Or should they try to regulate, but risk driving away founders for whom the American legal environment is extremely lucrative?
It's similar to the debate France had about raising the progressive tax rates - some ultrarich people would rather give up their French residency, than pay higher taxes.
There's clearly stuff the EU could do to be more competitive, but I think the core issue is that American investors can expect less risk and bigger payoffs, because the environment is friendlier to them, but the environment being friendlier to them leads to regular people getting screwed by giant companies that operate with no oversight. Fast forward the 2020s and you literally have planes falling out of the sky.
I don't think there are any great options.
I'm also aware this is a fringe view on HN, kinda by definition. It's a forum for founders, mostly in the US, and the median opinion on what you should be able to do with your company on here is extreme by most peoples' standards. But the echo chamber needs some dissent on this point.
Doing all the work and taking all the stress only to have the EU remove a chance of growth and exit is a problem that I never want to have. I went through some failed startups, and at least that was our own fault, but still I never want to do that again. I don't know what I'd do in this situation.
It's tough, it's also part of the reason so little is done here, just compare the size of market capitalization of say DAX40 (German top 40) or CAC40 (French top 40):
DAX40 $1.9T
CAC40 $2.8T
There are single companies in US that exceed both of these values.
Part of that is that you're taking a fixed number of companies. So if Europe has more, but smaller companies, the value of the top-40 would be lower than if they had fewer but larger companies. To me the first sounds healthier, everything else being equal.
EURO STOXX 50 would probably be a better benchmark, which has a total market cap of around €4.0T, which is more than any single company. (your general point stands though, it's nowhere near the US market)
Because the European capital markets are very different with far less local money going into it, more bank funding etc. The divergence between the US and Europe there is more than 100 years old.
> But man, as a business owner in EU, this would just make me not want to build an AI startup in EU
I am not an expert but does this kind of probes not help businesses against things like hostile take overs and against VC buying up all your competitors to crush you with scale?
I mean, the FTC would absolutely look into this agreement if you did it in the US. Regulators "looking into" things is not a thing we should be upset about, that's why they exist.
And not only this, everyone loses if the FTC and the likes don't do their job properly. I'm still amazed how much "small" people argue for big entities like microsoft. You won't have these problems in your lifetime.
Totally agree with this sentiment. I love open-source and will be on it's side to the end. But I'm not sure I want it forced upon people either. Companies should believe in the model and developers should choose companies that believe in that model.
I imagine there has to be some kind of security implication here, the same reason why the US is restricting the export of AI chipsets to china. It's not ideal if US megacorps are heavily investing in or buying out EU AI startups.
To be frank, I am more worried about the fact that they raised $385M from US investors at the seed stage. That speaks volume about how much it really is an EU company. Good luck to EU for retaking control of this ship.
385M USD is way too much for EU investors. They usually invest 10x-100x less. So the alternative without US investors would be to have no startup of this kind - great job, that will really help EU grow!
But man, as a business owner in EU, this would just make me not want to build an AI startup in EU
Like, purely on the basis that MS might not be allowed to take you over?
TBH I'd assume the FTC would at least be asking questions here, too. EC and FTC thinking on competition is generally not all _that_ different, but the EC tends to be quicker to act these days (this was not always the case; the FTC was very much out in front on Intel and Internet Explorer back in the day).
Mistral isn't exactly some decade-long state funded national champion. Its a 1 year old startup whose core staff all come from American tech companies. With 0 revenue and minimal market share, there's like no conceivable metric in traditional antitrust theory to block this. Yet the EU prevents it from taking foreign investment all the same.
Look at TSMC in comparison. It IS the national champion of Taiwan, yet its majority foreign owned, doesn't stop it from underpinning the Taiwan economy and spawning massive ecosystems in its local areas.. Taiwan's government understands its place in the international economy, so prefers to cooperate and trust its international partners.
If a Chinese company with massive government contracts had invested in OpenAI there is no way that the US would not start an investigation.
Sure, but if a European did we wouldn't.
So if you start in America, you can access both continents. If you start in China, you can access Europe and Asia. If you start in Europe, you're limited to one.
Granted, this is just a proble. But if it amounts to something, it's an asymmetrically chilling move.
> Clarifying a couple of things since we’re reading creative interpretations of our latest announcements:
- We’re still committed to leading open-weight models! We ask for a little patience, 1.5k H100s only got us that far.
- We have a reselling agreement with Microsoft, that we’re very excited about. Alongside similar partnerships, it will accelerate our growth.
- Microsoft invested in a small convertible note alongside many other companies, as a distribution partner. We are an independent European company with global ambitions, that part is not changing either.
> We’re seeing some interest for Le Chat and Mistral Large, on both la Plateforme and Azure, and we’ll be iterating fast!
[1] https://twitter.com/arthurmensch/status/1762818733016322168
It's similar to the debate France had about raising the progressive tax rates - some ultrarich people would rather give up their French residency, than pay higher taxes.
There's clearly stuff the EU could do to be more competitive, but I think the core issue is that American investors can expect less risk and bigger payoffs, because the environment is friendlier to them, but the environment being friendlier to them leads to regular people getting screwed by giant companies that operate with no oversight. Fast forward the 2020s and you literally have planes falling out of the sky.
I don't think there are any great options.
I'm also aware this is a fringe view on HN, kinda by definition. It's a forum for founders, mostly in the US, and the median opinion on what you should be able to do with your company on here is extreme by most peoples' standards. But the echo chamber needs some dissent on this point.
If EU wants to own its AI future, that’s not a great way of getting started.
If EU wants to own its AI future, it has enough money to buy one. They decided not to.
Also, EU doesn't but things for their consumers, do you even know what the EU is?
The solution is to mandate open weights. Not kneecap your flagship by putting it at a permanent capital disadvantage.
DAX40 $1.9T
CAC40 $2.8T
There are single companies in US that exceed both of these values.
I am not an expert but does this kind of probes not help businesses against things like hostile take overs and against VC buying up all your competitors to crush you with scale?
What is the most biggest EU software company? SAP?
There is a reason EU is investigating this, and this is exactly it. They are sick of the Microsoft extinguish aspect
EU has billions to invest in AI. I don’t buy that EU has “much less money than the US”.