ASML is making a strategic move by investing €1.3 billion ($1.5 billion) in French AI startup Mistral AI, which values the company at approximately €10 billion ($11.7 billion).

This investment aims to reduce Europe's reliance on U.S. and Chinese AI models, fostering greater self-sufficiency in AI technology.

Founded in 2023 by alumni from DeepMind and Meta, Mistral focuses on developing foundational AI models similar to ChatGPT and Claude, positioning itself as France's answer to OpenAI.

The deal exemplifies the growing convergence between traditional chip equipment providers like ASML and AI startups, highlighting a broader trend of significant investments in AI to drive innovation and market growth.

This move underscores the increasing importance of AI in the tech landscape, with traditional tech firms investing heavily in AI startups, creating new trading opportunities in stocks and cryptocurrencies.

Bank of America advised ASML on this strategic investment, which aligns with its broader goals to enhance efficiency through AI, although specific deal details remain undisclosed.

Mistral's revenue streams include free models, developer tools, paid API services, and enterprise partnerships with companies like CMA CGM, Peugeot, and Veolia, focusing on integrating AI into logistics and customer service.

Mistral's flagship product, Le Chat, launched in February 2024, quickly gained popularity in France, with over one million downloads in two weeks, and has since added features like multi-language reasoning and image editing.

The investment reflects a broader global trend, with AI startups like Mistral experiencing rapid growth, and recent funding rounds pushing valuations above $10 billion, signaling strong investor confidence.

This strategic investment also serves as a safeguard for Europe's industrial infrastructure and data security amid geopolitical tensions and export bans affecting the region.

Analysts suggest that this substantial commitment could positively influence ASML’s stock in the short term, as it demonstrates confidence in Mistral's potential to compete with industry giants like OpenAI.

Mistral aims to narrow the revenue gap with leaders like OpenAI through model development, product deployment, and infrastructure expansion, with recent revenue tripling indicating strong growth potential.

The deal is part of Europe's strategic efforts to develop independent AI infrastructure, with notable backing from investors including DST Global, Microsoft, and others, and is seen as a significant step toward European tech sovereignty.