Mistral AI’s rise has not escaped the attention of regulators, a French finance ministry official revealed that Paris had no prior knowledge of Microsoft’s investment in Mistral, responding to concerns in Brussels that the deal might have influenced EU policy.
Just days after Microsoft’s partnership was announced, some European lawmakers openly questioned whether Mistral – and by extension the French government – had lobbied for looser rules on AI on Microsoft’s behalf.
(Both Mistral and France had advocated against over-regulating startups during negotiations of the EU’s AI Act, pushing for exemptions for “European champions.”) Kim van Sparrentak, an EU parliamentarian, argued that the episode “seems to have been a front for an American-influenced big tech lobby,” noting that proposals to relax the AI Act nearly passed – and “now look. European regulators have been played.”
French officials vehemently denied any collusion. “We learned of the Mistral-Microsoft partnership only yesterday,” a finance ministry spokesperson told Reuters on Feb. 28, emphasizing it had “no specific consequences” for France’s stance and highlighting the upside that a young French AI firm joined Microsoft’s Azure ecosystem.
Mistral’s CEO Arthur Mensch took to social media to stress the company remains independent and European-led: “We have a reselling agreement with Microsoft… it will accelerate our growth,” he wrote, reaffirming Mistral is “fully under the founders’ control.”.
Meanwhile, EU antitrust chief Margrethe Vestager met with Mistral’s team in person, tweeting “We need vibrant competition in AI, now.”.
The regulatory reaction highlights the delicate balance Europe faces in nurturing its own AI champions while guarding against dominance by foreign tech giants.
Mistral’s case became a flashpoint in debates over the EU AI Act: it underscored both the bloc’s desire to back “sovereign” European AI scale-ups and the rising vigilance to ensure strategic startups don’t become proxies for Big Tech power.
The swift scrutiny of the Microsoft-Mistral deal ultimately saw the UK’s Competition Authority decline to intervene (finding Microsoft’s minor stake gave it “no material influence” over Mistral), but in Brussels the episode reinforced calls to carefully monitor partnerships that could impact Europe’s technological autonomy.
