French AI startup Mistral AI said it has raised 1.7 billion euros ($2 billion) in its Series C funding round led by leading semiconductor equipment manufacturer, ASML Holding NV.

The fresh funding was raised at a post-money valuation of 11.7 billion euros, said Mistral AI in a statement.

Existing investors including DST Global, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, Lightspeed and Nvidia also participated in the funding round, it added.

The fresh capital will help Mistral continue to develop custom decentralized frontier AI solutions that solve the most complex engineering and industrial problems.

Mistral AI CEO Arthur Mensch said that ASML as the lead investor brings together two technology companies operating in the same value chain.

ASML CEO Christophe Fouquet said that that the collaboration between Mistral AI and ASML aims to generate clear benefits for ASML customers through innovative products and solutions enabled by AI, and will offer potential for joint research to address future opportunities.

Last year, Mistral, co-founded by alumni from Meta and Google's DeepMind, had raised around $640 million in its Series B funding round in a mix of equity and debt led by General Catalyst.

The fresh funding comes as competition heats up with rivals OpenAI, Anthropic, xAI and Perplexity. Meta's aggressive AI push in the past three months has further intensified the competition.

Earlier this month Claude maker Anthropic also said it has raised $13 billion as part of its Series F funding round led by ICONIQ.