Mistral AI is Europe’s Last Chance
Without its own frontier AI company, Europe cannot secure its technological sovereignty and its competitiveness in the 21st century.
250 years ago, a small English startup, Boulton & Watt, played a key role in making Europe the world’s technological centre. Now the French company Mistral AI is the last chance to prevent it from slipping permanently to the periphery.
Diagnosis
Artificial intelligence will reshape the economy fundamentally. We are on the verge of one of the largest, fastest, and most profound technological transformations in history. Change is inevitable and unstoppable, and it will gradually spread across more and more sectors of the economy, increasing productivity. Countries that introduce regulations slowing the spread of machine intelligence will fall behind in the global competition; companies that adopt it half-heartedly will lose market share; and employees who are not proficient in it will be at a disadvantage in the labour market.
This is a decisive race with no way to opt out. Europe has long been aware of its technological decline and loss of competitiveness.1 Although it has always claimed to aim for the technological frontier, in reality, when it sees itself falling behind, it increasingly responds with protectionist measures to buy time for its companies to catch up. As a consequence, not only is it no longer at the forefront of technological innovation, but its citizens are also gaining access to the most advanced technologies later and later than other regions—consider self-driving cars as an example.
When it comes to artificial intelligence, this approach is not sustainable. In the coming decades, automation will spread to an ever-wider range of jobs, eventually affecting almost all white-collar work. An increasing share of office tasks will be carried out by artificial intelligence companies, much like SaaS operates today. In this vast market—amounting to several percent of global GDP—a handful of the most competitive firms will dominate. If none of these companies are European, nothing will offset the lost income, tax revenue, and consumption resulting from disappearing roles; all this revenue will flow outside the EU (not to mention the data). This is no longer merely about a missed opportunity, as in past decades, but about a lasting economic decline measurable in GDP percentage points.2 And if Europe chooses the other path and responds with bans or restrictions, it will deprive itself of the most important technology of our era and will fall permanently and irreversibly behind.
We must do away with illusions. There are three misconceptions that many in Europe cling to:
Instead of artificial intelligence, we should build on our traditional strengths. Our best companies are specialised in technologies where the potential for breakthroughs is limited. The internal combustion engine is one of the most highly optimised machines in the world, and the automobile one of the most highly developed consumer products, but the innovations driving significant growth in the automotive industry today are in self-driving technology and batteries, two areas where Europe is lagging behind. Europe’s other strength, the pharmaceutical industry, is one of the sectors most exposed to artificial intelligence. The largest research and innovation (R&I) investments in Europe are still directed toward the automotive and pharma industries—in the United States, this was the case twenty years ago. We have reason to be proud of our achievements in these fields—and remain proudly stuck in the 20th century.
It is sufficient to specialize in certain specific applications of AI. Without its homegrown general-purpose artificial intelligence model, Europe will become entirely dependent on American and Chinese models, paying with its profits, its data, and its sovereignty. This dependence will gradually extend to industry-specific applications in sectors crucial for the Union, such as automotive, financial services, telecommunications, healthcare, transportation, and retail. We do not need to create a universal AI system, but it is naïve to think that any specialized application can compete with those that use ten or a hundred times more computing power, whether for training or for inference.
If we really wanted to, we could reach the global frontier even with a new company. The performance gap between the leading models of top artificial intelligence companies is fairly consistent. There are no miracles, clearly illustrated by how difficult it is for later entrants such as xAI or the leading Chinese firms to catch up with the OpenAI–Google–Anthropic trio. It is not that new companies will successfully break into the top tier; on the contrary, some of the existing ones will fall out of it.
Europe has only one frontier artificial intelligence company. The continent’s technological sovereignty and competitiveness in the 21st century can only be ensured if it has its own cutting-edge AI firm, over which it exercises strategic control and to which it can guarantee its companies access. There is only one such candidate: France’s Mistral AI. Whether in benchmarks or user evaluations, Mistral’s most advanced models—although somewhat behind the global leaders—are the best in the world outside the United States and China. Clearly, there is no other AI company in Europe that is even comparable. While this is a disadvantage because it does not encourage competition, it is also an opportunity: whereas Anthropic, Google, Meta, OpenAI, and xAI share the same market, Mistral—if supported by regulation—could become dominant in Europe. Moreover, thanks to the widespread use of nuclear energy, France is among the best-positioned countries in the world to meet the energy demands of data centres—a competitive advantage even relative to the United States.
Therapy
For Mistral—and, through it, Europe—to succeed, two things are required:
We must build the world’s largest data centre. Last May, the French national investment bank Bpifrance and the Emirati state investment fund MGX, together with NVIDIA and Mistral, launched a joint venture to build Europe’s largest AI campus near Paris by 2028, backed by an investment of around €8.5 billion. If it began operating today, this would be the largest data centre not only on the continent but in the entire world; however, by the time it reaches its final capacity of 1.4 gigawatts in 2030, it will rank as only medium-sized. This is a good and important step, but for Europe to keep pace with the global frontier, it must set an even more ambitious goal: building a 5-gigawatt data centre by 2030. The capital required to finance it must come from within Europe: France must create the conditions—such as by establishing a joint fund—that enable European countries to invest in the project, thereby giving them a stake in Mistral’s success.3
Regulation should not hinder tech companies, but support them.
Mistral must be able to play by the same rules as its American competitors—for example, in building and managing large, integrated datasets—otherwise we will see a race in which one runner starts with their legs tied together. Simplification is important, but not sufficient: we must put an end to the practice of tying our companies up in administrative red tape as a precaution against largely non-existent risks. It is untenable that while the United States’ artificial intelligence action plan is titled “Winning the Race,” the European Union’s main ambition is to become the most tightly regulated AI market in the world. This approach comes at a high cost: economic stagnation, a lack of innovation, and ultimately a decline in living standards.
Authorities must stop harassing innovative technology companies. Excessive, inconsistent regulation and overzealous enforcement by authorities drive dozens of tech companies—and their founders—out of Europe each year, mostly to the United States and to a lesser extent to the Emirates. The creativity of these people no longer enriches Europe; they go on to succeed with their ventures anyway, only no longer within the European economy.
EU regulation must ensure the single (“one”) market and Mistral’s competitive advantage. Mistral’s greatest potential edge—alongside French nuclear energy—is its access to the EU market. Regulation should not merely guarantee this; it should also encourage European companies—and, in the case of European governments, require them—to choose a European provider.4 This restriction on competition should be offset by giving all European countries the opportunity to share in Mistral’s success through investment in the data centre.
There is no other way. Some of the assumptions above might turn out to be wrong. It may be that artificial intelligence will not have such a transformative impact on the economy, or that Mistral will fall behind its competitors despite all joint efforts. But even in that case, this roadmap is still worthwhile: it will lead to the creation of one of the world’s largest data centres and the strengthening of European innovation.
On the other hand, what happens if these scenarios materialise while we fail to act? In technology, Europe first slipped to second place behind the United States over the past century, then to third place behind China in the past decade. The Gulf region will be the next to overtake us—and not the last. Technological decline will lead to economic decline: in the long run, we cannot provide our citizens with a high standard of living if we do not produce the most advanced, highest-value-added products and services ourselves, but instead have to rely on others for them.
This is Europe’s last chance. The world is changing, unstoppably and inescapably; the only question is where we will end up at the end of the transformation. Those who take the lead will win; those who hesitate will lose. If we want the continent to be a shaper of the 21st century, not just a bystander, we must act. True, this plan is an implicit acknowledgment of France’s technological dominance5—but the alternative is not a fairer and more equal share in the AI revolution, but being left entirely behind. This is Europe’s best—and last—chance.
Remember the Lisbon Strategy, Europe 2020, or the New Industrial Strategy? The Aho, Letta, and Draghi reports? Or, most recently, the Budapest Declaration?
According to Goldman Sachs, AI-powered automation could drive productivity growth of 1.5–2.9% per year, while McKinsey estimates it could reach as much as 3.8% annually.
This could be implemented most effectively through an intergovernmental framework, without involving EU institutions, which are bureaucratic, slow, and tend to prioritise political balancing over efficiency. Although there is an EU instrument for the development of computing infrastructure—the AI Continent Action Plan, which aims to establish around a dozen smaller and five medium-sized data centres— it says a lot about its level of ambition that it defines Gigafactories as facilities with more than 100,000 processors. This corresponds to 0.1–0.2 gigawatts, at least an order of magnitude smaller than what would be needed.
This is also addressed in Mistral’s own comprehensive AI playbook, published a few weeks ago.
For many, it is still a new, unusual, and almost heretical idea that Europe’s centre of technology and innovation is no longer Germany—but Germany dismantled this position through long, methodical, and persistent effort: first by shutting down its nuclear power plants in the first half of the 2010s, then by undermining its most competitive sector, the automotive industry, in the second half of the decade.