ASML has become the largest shareholder in EU rival OpenAI. What can hinder the alliance?

Unique chip manufacturing equipment maker ASML has invested €1.3 billion in French startup Mistral AI, becoming its largest investor. The deal has raised Mistral's valuation to €11.7 billion, making it Europe's most expensive AI player. However, the startup has yet to prove competitive against richer rivals from the US and China, with ASML being held back by trade restrictions and duties. Nvidia and leading US venture capital funds also participated in the round.

ASML from the Netherlands has acquired an 11% stake in French startup Mistral AI for €1.3 billion, the companies said in a joint statement. In total, Mistral AI raised €1.7 billion as a result of the investment round C. ASML became the largest investor in the French startup, according to Reuters.

As part of the investment round, Mistral was valued at €11.7 billion, making it one of Europe's most expensive private companies, Bloomberg writes.

Mistral CEO Arthur Mensch said the company's three co-founders and employees will remain majority shareholders. ASML CFO Roger Dassen will join the startup's board of directors. Several existing investors also participated in the funding round along with ASML, including Nvidia, as well as US venture funds Andreessen Horowitz, General Catalyst and DST Global.

Shares of ASML rose about 1% at the moment in Amsterdam trading on Tuesday, but then lost momentum. At the premarket in New York, the stock added less than 0.1% after rising 1.9% in the main trading a day earlier.

The alliance gives Mistral - the only serious rival to U.S. AI giants like OpenAI - the backing of one of the continent's biggest and most influential tech players. It's a victory for the EU's technological sovereignty movement, which advocates less reliance on Silicon Valley tools and has grown stronger amid President Donald Trump's hard-line policies, Bloomberg writes.

However, ASML CEO Christophe Fouquet said that the main goal of the deal is to integrate AI within the company, not to create a European industry leader, reports said. The investment and cooperation with Mistral will give the chip equipment maker an opportunity to introduce generative AI services into its machinery and business processes, Fouquet added.

"We want to imbue the entire ASML with artificial intelligence," Fouquet said in an interview with Bloomberg.

For Mistral, however, the deal means gaining significant funds in an expensive and competitive market, Bloomberg noted

According to analysts at New Street Research, generative AI could improve the accuracy of ASML's machines by collecting and analyzing more data about their performance. "An investment of less than 1% of ASML's market capitalization is well justified to gain access to advanced intellectual property and competencies in this area," analysts Pierre Ferragu and Rolf Balk wrote in a note on Monday. It was quoted by Bloomberg.

Citigroup analysts also called the partnership a "long-term positive" in a note Tuesday. "ASML will be able to accelerate its product development with AI models, bringing solutions to market faster and with higher performance," said the analysts, led by Andrew Gardiner.

Executives from both companies downplayed the deal as a move to bolster Europe's technological sovereignty at a time when the region is increasingly embroiled in a standoff between the U.S. and China, the Financial Times noted. ASML has been hit both by U.S. import duties and Washington's restrictions on the types of lithography equipment it can sell in China.

While Mistral has already signed agreements with major European companies including BNP Paribas SA and Stellantis NV, it has yet to disclose any major clients in the U.S. despite actively pursuing that market, the newspaper added.

The startup is also finding it difficult to compete with US rivals. Companies such as OpenAI, Anthropic and Elon Musk's xAI have attracted significantly more investment. OpenAI's valuation reached $500 billion in a recent round of secondary stock sales, Bloomberg writes.

Mistral also faces increasing competition from Chinese players such as DeepSeek and Alibaba for "open" artificial intelligence systems that provide access to advanced AI technology for any user, the FT writes.

"Our U.S. rivals are more focused on the mass consumer market ... For us, the core value is in partnering with truly technology-driven companies," Mensch said.

ASML produces some of the most complex and expensive machines in the world. Its lithography equipment can cost hundreds of millions of euros and the machines themselves contain up to 100,000 parts.

Unlike other semiconductor companies such as Nvidia and Intel Corp., ASML has generally avoided venture capital investments. It has backed a Dutch technology fund and several local startups, including integrated circuit developer Smart Photonics, with a €100 million investment. Typically, however, the company buys stakes in elements of its supply chain, such as optics maker Carl Zeiss SMT, to develop lasers used in its equipment, Bloomberg notes.

This article was AI-translated and verified by a human editor