French artificial intelligence (AI) startup Mistral AI is in advanced talks to raise about €450m ($487.8m) in funding, reports Bloomberg, citing sources.

A group of investors could invest over €325m in equity, of which €200m could come from Andreessen Horowitz, the sources said.

Technology majors NVIDIA and Salesforce have agreed to contribute an additional €120m in the form of convertible debt.

Some of the specifics of the transaction, which could value the OpenAI rival at around $2bn, are still being finalised and could still change, they added.

As part of the deal, the three co-founders of Mistral AI have agreed to sell more than €1m worth of equity, each, according to documents outlining the conditions of the transaction.

Three more Mistral insiders—among them, Cedric O, a former French minister who serves as the company’s main adviser—are set to divest shares, with an estimated value of around €1m.

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By GlobalData

Representatives of Mistral AI, NVIDIA, Salesforce, and Andreessen Horowitz declined to comment on the development. Requests seeking comment from Cedric O did not elicit a response, reported the media outlet.

Guillaume Lample, Arthur Mensch, and Timothee Lacroix — former scientists from DeepMind and Meta Platforms — co-founded Mistral AI earlier this year.

The Paris-based company is engaged in offering open source software for generative AI tools, such as chatbots.

Just few weeks after being launched, Mistral AI raised $113m in seed funding round.

The seed round was led by Lightspeed Venture Partners, with participation from Redpoint, Index Ventures, Exor Ventures, Headline, and LocalGlobe, among others.

The tech industry’s confidence about the potential and profitability of AI companies is highlighted by the $2bn valuation for a company that is less than a year old.

GlobalData projects that the global AI industry will reach a value of $383.3bn by 2030, growing at a compound annual growth rate of 21% from 2022 to 2030.