The billion dollar plus funding raise for French AI startup Mistral could signal Europe's AI sector is catching up with the US.
Corporate funding of European AI startups is finally playing catch up with the billions of investment poured into US AI startups, in a sign that investors are looking more favourably at Europe’s startup ecosystem for artificial intelligence technologies.
The value of funding rounds for European AI companies where at least one corporate backer was involved jumped 600% in the third quarter of 2025 compared with the previous quarter, with the $2bn raise for French AI company Mistral accounting for the big increase.
ASML, the Dutch maker of lithography technology used in chipmaking, led a series C round for Mistral with a €1.3bn ($1.5bn) investment in early September. Nvidia, the US maker of GPUs used in AI applications, was also part of the round.
Nvidia is making high-profile investments in European AI, particularly in the UK where it said it would invest $500m in AI infrastructure startup Nscale as part of its deployment of 60,000 of its GPUs in the UK.
The US chipmaker last week announced a $500m investment in UK startup Wayve, a developer of AI software for self-driving vehicles. It is also revealed partnerships with UK robotics and life science startups and university spinouts to advance physical AI and drug discovery.
Corporate-backed funding of US AI startups still vastly exceeds that of Europe. Multi-billion dollar mega rounds characterise the funding environment for AI companies in the US, such as the $40bn raise for OpenAI in the first quarter of 2025 and the $14.3bn round for Scale AI in the second quarter.
The value of fundraising rounds for European startups are notably smaller. The average size of corporate-backed funding for European AI companies tracked by GCV since the start of 2023 is $62m, compared with $267m for US deals.
The $2bn series C funding for Mistral is so far the largest corporate-backed round for a European AI company. ASML did not deliberately invest in a European AI company instead of a US one, said a spokesperson. “We were looking for a strategic partner in AI and Mistral was the best fit,” she said.
