French AI startup Mistral, widely regarded as Europe’s strongest contender to rival U.S. and Chinese AI leaders, is intensifying its Middle East engagement as it explores a $1 billion capital raise, according to Sifted.

The startup’s current Gulf investors include Saudi Arabia’s Sanabil and UAE’s DAMAC, with reported talks underway with Mubadala, Abu Dhabi’s new AI investment vehicle MGX, and potentially Saudi Arabia’s Public Investment Fund (PIF).

Founded in 2023, Mistral opened its Gulf push last year with investment from Sanabil during its Series B round, followed by backing from Damac. This pivot reflects a broader pattern: facing limited large-scale growth capital in Europe, Mistral is tapping Gulf capital pools to diversify its investor base beyond its €600 million Series B led by DST Global and General Catalyst.

On the technology front, Mistral launched Saba in February 2025 — a 24 billion-parameter model specifically trained on datasets from the Middle East and South Asia to excel in Arabic and regional language fluency. The model is designed for deployment via API or on-premise, with benchmarks suggesting it outperforms much larger models, especially in cultural and linguistic accuracy. arXiv +7 Mistral +7 CDO Magazine +7

Strategic infrastructure and research partnerships are deepening. In May 2025, Mistral inked a cooperation agreement with G42 to co-develop AI infrastructure, platforms, and foundation models — including a joint initiative with UAE’s MBZUAI, aimed at advancing frontier model research and building regional talent. Simultaneously, Mistral confirmed a planned data centre project in France alongside MGX, Bpifrance, and Nvidia, aimed at delivering 1.4 gigawatts of compute capacity.

The move underscores how the Middle East is emerging as a prime strategic partner for Europe’s top AI ambitions. Gulfs sovereign wealth and tech-capital strength aligns well with European innovation and ethical frameworks, a mutually beneficial synergy in the AI race. As a Mistral spokesperson noted, “The Middle East is an interesting region... they have a proactive approach to tech and... dedicate large amounts of funding, which creates consequential commercial opportunities for us.”