PARIS: Microsoft on Tuesday sought to reassure European users with a "multi-billion-dollar" deal to rent AI infrastructure from Mistral, hoisting the French developer into the lucrative business of renting compute capacity.

Mistral's own AI models will also be offered directly to Microsoft clients through its tools including AI assistant Copilot.

The agreement "strengthens Europe's AI infrastructure while helping Microsoft meet growing demand for cloud and AI services" on the continent, the two companies said in a joint statement.

Neither company specified the exact dollar value of the deal or the amount of computing power Mistral would supply.

But the French firm has targeted 200 megawatts of capacity by 2027 and aims by 2030 to reach one gigawatt -- roughly equivalent to the output of one of France's dozens of nuclear reactors.

Mistral told AFP that the tie-up "gives us greater visibility to speed up the financing and development of Mistral Compute", its cloud and AI infrastructure business.

Founded three years ago and with 1,000 staff, Mistral is ploughing four billion euros ($4.6 billion) into data centres in France and Europe, with one already operational outside Paris and another under construction in Sweden.

Its ambitions remain relatively small compared to the hundreds of billions of dollars and gigawatts of compute being built by American firms.

But it joins the multiple generative AI developers now selling computing power to others as the industry expands and high-end chips grow scarce.

For instance, Elon Musk's SpaceXAI struck a deal with Anthropic in May.

The AI lab behind the Claude chatbot is also in talks for a deal worth billions to use infrastructure belonging to Facebook and Instagram parent Meta, according to media reports.

Microsoft insisted that using infrastructure located physically in Europe could address clients' growing concerns about dependence on US tech firms in a time of transatlantic discord.

"Europe should have access to the world’s most capable AI without compromising control over their data, operations or digital future," Microsoft President Brad Smith said in the statement.

The company has sought to position itself as the cloud computing provider most compatible with European tech sovereignty concerns.

Clients could run the Mistral models available through Copilot on Microsoft's cloud computing infrastructure or their own local hardware, the American company said.

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Microsoft strikes deal for Mistral's AI computing power

Microsoft strikes deal for Mistral's AI computing power