Microsoft has deepened its partnership with French AI developer Mistral, despite its existing ties to OpenAI, in a multi-billion-dollar infrastructure agreement designed to expand European data centre capacity and reduce the continent's reliance on foreign AI providers.
Multi-Billion Dollar Infrastructure Investment
The agreement brings Mistral Medium 3.5 and OCR 4 into Microsoft Foundry, with Mistral Medium 3.5 also added to Microsoft Copilot Studio. Mistral Medium 3.5 is an open-weight model built to let developers and enterprises deploy AI applications with sovereign control, while OCR 4 supports structured document processing and agentic automation workflows.
Arthur Mensch, Co-Founder and CEO of Mistral, said the company's mission has always been to put frontier AI in the hands of every organisation while keeping them in control of their technology, adding that Microsoft's platform lets Mistral's models reach enterprises and public institutions at global scale.
The deal builds on a relationship dating back to 2024, and follows a 2025 collaboration in which Microsoft and Mistral helped Singapore's HTX (Home Team Science and Technology Agency) integrate Mistral Phi-4 models and small language model training frameworks into its AI platform.
Data Centre Capacity Expansion
As part of the agreement, Mistral is committing US$1.43bn to new data centres in Sweden, adding to Microsoft's own plans, announced last year, to grow its European data centre capacity by 40% over two years.
Mistral is also expanding its GPU footprint, deploying thousands of NVIDIA Vera Rubin GPUs to increase compute power. Ian Buck, Vice President of Hyperscale and High-Performance Computing at NVIDIA, said agentic AI is driving unprecedented demand for high-performance, energy-efficient infrastructure, and that deploying Vera Rubin systems at scale will give customers the computing foundation to build and run the next generation of AI across Europe.
"Europe should have access to the world's most capable AI without compromising control over their data, operations or digital future."— BRAD SMITH, VICE CHAIR AND PRESIDENT, MICROSOFT
Samsung Investment Discussions
Mistral is separately in talks with Samsung, according to the Financial Times, over a deal worth as much as €1bn (US$1.14bn).
Ashish Patel, Managing Director at Houlihan Lokey's Capital Solutions Group, said increasing pressure from European governments is driving the agenda around European sovereignty, including efforts to cut dependency on critical technologies historically supplied by the US and China, and that this shift in sentiment is increasingly reflected in capital allocation decisions.