Mistral Urges Telecoms to Embrace the Hyperscaler Opportunity

In a recent appearance at Mobile World Congress, Mistral CEO Arthur Mensch made a strong case for European telecoms to get more invested in building data center infrastructure and becoming hyperscalers themselves. Mensch argued that this could be a boon for the regional AI ecosystem.

"We would welcome more domestic effort in making more data centers," Mensch said, noting that Mistral is already investing in building its own data center in France. He sees the AI revolution as an opportunity to "decentralize the cloud" and have more players in the field beyond the current trio of hyperscaler giants - Amazon, Google, and Microsoft.

Mensch urged European companies to reduce their reliance on U.S. tech where possible, though he acknowledged the pragmatic reality that there are no true non-U.S. alternatives for some critical infrastructure. He was less critical of EU regulation like the AI Act, suggesting the bigger challenge is the fragmentation across the 27 member states of the EU single market.

In fact, Mensch voiced support for consolidation in the telecoms sector, arguing that fewer telcos per market would make it easier for Mistral to establish partnerships. The AI startup sees opportunities to work with network operators on infrastructure upgrades to accommodate the "personalized" data streams that AI will enable.

Mistral has already struck a distribution deal with French telecom Free to offer its AI assistant Le Chat to subscribers. Mensch also believes AI could help telecoms reduce their operating expenses. While he said the EU's AI regulations are "not ideal," he welcomed a shift in perspective among policymakers toward greater investment in the technology.

Looking ahead, Mensch predicted that AI models will become increasingly specialized. Mistral will focus on capturing data from every human-model interaction to develop better, more tailored AI systems.

The core of Mensch's message was a call to action for European telecoms to seize the opportunity presented by the rise of AI. By building out their own data center infrastructure and cloud capabilities, they can reduce reliance on U.S. tech giants and help cultivate a stronger regional AI ecosystem. It's a bold vision, and one that Mistral is eager to partner with the telecoms industry to realize.