While the company did not disclose its valuation, a source familiar with the matter put it at 2 billion euros - an amount that would put the French startup among the top AI companies in the world.

Paris-based Mistral AI, founded by former Meta and Google AI researchers, had in June raised 105 million euros just a month after being set up.

The company also launched Mixtral 8x7B, an open model that seeks to be Europe's answer to AI platforms such as OpenAI's ChatGPT and Google's Bard. The Mistral AI platform is available in beta access and will be operational by early 2024.

Mistral had been lobbying to make changes to the EU AI Act, that is in the process of becoming a law, and had got the support of the French government.

It has not yet commented on the deal on AI legislation reached on Friday.

Its backers include Salesforce, BNP Paribas, General Catalyst, La Famiglia, Eric Schmidt, New Wave, Motier Ventures, and Sofina.

The company said it aims to achieve frontier-level AI capacities in the coming months and build developer and enterprise-oriented products.

($1 = 0.9290 euros)

(Reporting by Gnaneshwar Rajan in Bengaluru, Editing by Louise Heavens and Bernadette Baum)

By Supantha Mukherjee