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Microsoft announced a multi-year agreement with Mistral AI, a French AI startup

Microsoft announced on Monday a multi-year agreement with Mistral AI, a French artificial intelligence startup that competes with OpenAI, the San Francisco-based company that Microsoft has invested billions of dollars in. The deal signals Microsoft's efforts to diversify its AI offerings and reduce its dependence on OpenAI, which has faced regulatory scrutiny and criticism over its exclusive licensing of its ChatGPT technology.

According to a press release by Microsoft, the agreement involves a small investment in Mistral AI, as well as a collaboration to provide commercial language models on Microsoft's Azure cloud computing platform. Mistral AI will also launch a public beta version of its chatbot, called Le Chat, which is powered by its latest large language model, Mistral Large. Mistral Large is claimed to be comparable to OpenAI's GPT-4, Google's Gemini Pro, and Anthropic's Claude 2 in terms of size and performance.

Mistral AI was founded in 2023 by three former researchers from Google and Meta: Arthur Mensch, Guillaume Lample, and Timothee Lacroix. The company has raised over $500 million in funding from investors such as SoftBank, Sequoia, and Andreessen Horowitz, and has achieved a valuation of over $10 billion. Mistral AI is known for its open-source approach to developing AI, which means it publicly releases key components of its models, unlike OpenAI, which keeps them secret.

Mistral AI's CEO Arthur Mensch said in a statement that the partnership with Microsoft will enable the company to scale up its operations and reach more customers and developers. He also said that Mistral AI's vision is to democratize AI and make it accessible and affordable for everyone.

Microsoft's president Brad Smith said in a statement that the partnership with Mistral AI reflects the company's commitment to supporting innovation and diversity in the AI industry. He also said that Microsoft sees AI as a new sector of the economy that will create new businesses and opportunities.

The deal comes as Microsoft is under investigation by regulators in the US, EU, and UK over its relationship with OpenAI, which has been accused of anticompetitive practices and ethical concerns. Microsoft invested $1 billion in OpenAI in 2019, and later increased its stake to $13 billion, giving it exclusive access to OpenAI's ChatGPT technology, which is widely used for chatbots and other generative AI applications. However, some critics have argued that ChatGPT poses risks to privacy, security, and social welfare and that Microsoft's dominance over it could stifle innovation and competition in the AI market.

By partnering with Mistral AI, Microsoft may be able to diversify its AI portfolio and offer more choices and alternatives to its customers and developers. It may also be able to reduce its reliance on OpenAI, which has been pursuing its own ambitious and controversial projects, such as creating artificial general intelligence (AGI) and building a supercomputer. However, it remains to be seen how the deal will affect Microsoft's existing relationship with OpenAI, and whether it will satisfy the regulators and critics who have been monitoring the AI industry.