Microsoft announced a new partnership with Mistral AI on Monday, a French startup whose advanced large language models rival OpenAI’s ChatGPT and Microsoft Copilot. Mistral also released Mistral Large, its most advanced language model to date, and “le Chat,” a chat interface built on top of Mistral’s models.

Microsoft made a $16 million investment in Mistral AI, a company spokesperson confirmed to Gizmodo. The deal, which is a relatively small sum for Microsoft, will allow it to partner with one of its biggest open-source competitors.

The European Commission is looking into Microsoft and Mistral’s new deal, a spokesperson told Gizmodo on Tuesday. The regulator’s investigation into Microsoft and OpenAI’s partnership is already underway, but this new deal could bring more anti-competitive concerns.

The multi-year partnership marks a mainstream embrace of Mistral, which has shocked the AI community with its world-leading technical abilities. Mistral Large ranks second to GPT-4 on a leaderboard of AI models’ common sense and reasoning abilities, also known as massive multitask language understanding (MMLU). Mistral’s models will be available alongside OpenAI’s models on certain Microsoft Azure services.

Mistral’s new models, Mistral Large and Mistral Small, are proprietary and not open-source like its previous models, according to Artificial Analysis. Mistral’s new models both outperform Mixtral-8x7B, an older open-sourced model that was seen as a promising development for the open-source community. Until Mixtral-8x7b, open-source models struggled to keep up with proprietary models like Claude-2, Gemini-Ultra, and ChatGPT-4. Mistral says it will also bring open-source models to Azure.

Microsoft’s investment in Mistral could be seen as a hedge against OpenAI, though Microsoft wouldn’t describe it that way. Until now, OpenAI was the only AI startup Microsoft heavily partnered with. CEO Satya Nadella has already invested $13 billion into Sam Altman’s OpenAI, offering the startup’s technology in several key Microsoft products. The relationship drew attention from regulators after Microsoft hired Sam Altman immediately after OpenAI’s board fired him. Starting today, OpenAI will now share space on Azure servers.

Mistral’s new products seem to be following OpenAI’s playbook. Le Chat is a ChatGPT-like service that runs on Mistral Large and Mistral Small. Mistral also launched le Chat Enterprise, a similar product to ChatGPT Enterprise, aimed at offering AI solutions to European businesses. Not to mention, Mistral seems to be “closing” its best models, no longer making them open-sourced.

The route from a promising, open-sourced AI startup to a closed partner of a large cloud provider is all too familiar. OpenAI closed off its models shortly before it partnered with Microsoft. The company has drawn much criticism from Elon Musk and others for no longer being “open” or a “non-profit.” 

When it comes time to monetize AI models, most tech companies have chosen to stop open-sourcing their models. It’s unclear whether that’s for security reasons or to protect intellectual property, but it’s a concerning trend for the open-source AI community.