Mistral signs Airbus and BMW as it brings AI to manufacturing

FRENCH artificial intelligence startup Mistral AI is expanding into advanced manufacturing, striking deals with new customers Airbus SE and BMW AG as it looks to so-called physical AI to fuel growth.

Paris-based Mistral offers AI models and computing infrastructure to corporate clients, and now aims to apply AI to industrial engineering processes including design, simulation and quality control, the company announced on Thursday. Financial terms with the new customers were not disclosed.

“One of the strengths of Europe is in its high-end manufacturing,” said chief executive officer Arthur Mensch during an interview with Bloomberg TV, describing the new push as putting “intelligence into products that have a real existence.”

A growing number of startups have been focusing on applying AI in real-world environments.

Companies such as UK-based PhysicsX are building AI simulation software for industrial settings, while former Meta Platforms chief scientist Yann LeCun and Stanford University professor Fei-Fei Li founded companies focused on “world models,” which can predict how people and objects move around in real life.

Airbus has agreed a five-year contract to use Mistral’s AI on its commercial aircraft, helicopter and space businesses. BMW will use Mistral’s AI to help solve problems in auto manufacturing and research.

Mistral’s expansion follows its 1.3 billion-euros (S$1.91 billion) investment from chipmaking-equipment provider ASML Holding NV last year, and their joint efforts to embed AI across the Dutch company’s design processes and machinery, Mensch said.

The startup also announced its acquisition of Austrian AI simulation startup Emmi earlier in May.

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Mistral, formed in 2023 and valued at 11.7 billion euros last year, now has 1,000 employees and is targeting 1 billion euros or more in revenue for 2026, Mensch said during the interview. US competitor OpenAI generated about US$5.7 billion in revenue in the first quarter of the year, The Information reported.

The company is anticipating capital expenditure of about 10 billion euros over the next few years as it builds out data centre capacity, Mensch said.

A new 10MW facility for inferencing — where models can draw conclusions from new data — will open in the third quarter in Les Ulis near Paris, Mistral said. The company is targeting 200MW of capacity by 2027, and 1GW by 2030.

Mistral previously announced debt financing for another data centre in Bruyeres-le-Chatel outside Paris.

The company is also working with French energy supplier EDF to optimise its plants and construction operations, it said on Thursday, as well as Amazon.com Inc. to offer quality control in languages other than English for its AI assistant Alexa+. BLOOMBERG