Elon Musk mulled Mistral partnership to take on OpenAI and Anthropic, reports say

Musk's AI startup xAI reportedly proposed a three-way partnership with Mistral and Cursor

US billionaire Elon Musk's startup xAI has reportedly held discussions for a potential partnership with Paris-based model developer Mistral AI in recent weeks.

According to Business Insider, which cites people familiar with the matter, the US AI giant looked into a three-way partnership with Mistral and buzzy code-editing startup Cursor, which is based in San Francisco. Earlier this week SpaceX, which owns xAI, announced it had struck a deal giving it the rights to acquire Cursor for $60bn.

Mistral, which launched in 2023, is one of Europe's most highly-valued AI startups, with an €11.6bn valuation. The startup builds AI models and infrastructure, and is considered one of the region's only competitors against US Big Tech giants in the field.

Mistral and xAI did not immediately respond to a request for comment.

Competing against AI giants

According to the reports Musk proposed the partnership as part of xAI's efforts to catch up with fast-growing competitors like OpenAI and Anthropic.

xAI, which is behind AI chatbot Grok, was acquired by Musk's spacetech company SpaceX in February for $250bn. The AI startup is building several large-scale AI infrastructure projects such as the Colossus supercomputer in Memphis. It reportedly lost $6.4bn in 2025, up from $1.56bn in 2024, according to the Financial Times.

Anthropic, the maker of AI chatbot Claude, was recently reported to have surged to a trillion-dollar valuation on secondary markets, while last month OpenAI raised $122bn at an $852bn valuation.

Since launching in 2023 Mistral has raised nearly €2.8bn ($3.2bn), reaching an €11.6bn valuation ($13.6bn) last year when it secured a €1.7bn ($2bn) Series C led by Dutch semiconductor equipment manufacturer ASML.

Devendra Chaplot, an AI research scientist who was a member of Mistral's founding team between 2023-25, joined xAI as a member of technical staff two months ago, according to his LinkedIn profile.