Microsoft partners with Mistral AI in multibillion‑dollar European AI deal

Microsoft announced a partnership with French AI start‑up Mistral AI that involves a multibillion‑dollar investment to expand European artificial‑intelligence infrastructure. Under the agreement, Microsoft will lease compute capacity from Mistral’s data centres in France and Sweden, targeting 200 MW of capacity by 2027 and a gigawatt by 2030. The deal integrates Mistral’s Medium 3.5 and OCR 4 models into Microsoft’s Foundry and Copilot Studio, and makes the models available to Azure customers through Azure Local, allowing on‑premise or fully disconnected deployments for regulated sectors such as banking, health care, defence and critical infrastructure. Both companies cite the need to reduce Europe’s reliance on U.S. AI services and to safeguard data sovereignty. Microsoft president Brad Smith said Europe must have access to the most advanced AI without compromising control of its data, while Mistral CEO Arthur Mensch welcomed the broader global reach the partnership provides. The collaboration also diversifies Microsoft’s AI supply chain beyond its primary partner OpenAI.