AI startup Mistral is in talks with investors to raise $1 billion at a valuation of $10 billion, according to the Financial Times.

Abu Dhabi's AI and advanced technology investor MGX is one of the investors Mistral is in talks with for the fundraise.

The French startup's plans to raise fresh capital comes amid mounting competition from US and China based startups.

Earlier in June, Mistral released Europe's inaugural AI reasoning model, which employs logical processes to generate responses.

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 last year.

Other investors in the startup include Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, Samsung Venture Investment Corporation, and Salesforce Ventures.