ASML-Mistral AI: It’s the Geopolitics, Stupid

French President Emmanuel Macron couldn’t have scripted it better. In a week of political dysfunction in France, Parisian tech darling Mistral AI SAS bagged a €1.3 billion ($1.5 billion) investment from Dutch chip-machine-maker ASML Holding NV that values the startup at €11.7 billion. The pair also signed a strategic partnership that will deepen ties. It’s a deal that’s raising eyebrows — this is somewhat outside ASML’s core hardware business — but it has a lot going for it.

For ASML, it’s a chance to sprinkle the pixie dust of AI at a time when its business outlook is getting cloudier and its shares are treading water. ASML is in a market of one when it comes to ultra-sophisticated machines for chip manufacturing, but that market is coming under pressure from trade barriers, Sino-American tensions and customer cutbacks. Investing in Mistral’s large-language models could give ASML more of an edge by speeding up research, smoothing out imperfections in the manufacturing process and reducing downtime for customers. “We want to flood the entire organization of ASML with AI,” Christophe Fouquet, ASML’s French boss, told Bloomberg.