Mistral AI—Mistral AI lobbied to weaken EU AI Act while co-founder held undisclosed €23M stake and company secretly negotiated Microsoft deal
From mid-2023 through 2024, Mistral AI conducted an aggressive lobbying campaign against EU AI Act provisions. The campaign was led by co-founder Cédric O, France's former Secretary of State for Digital Affairs, who joined Mistral in spring 2023 and immediately began lobbying his former government colleagues. O's initial €176 investment grew to approximately €23 million while he lobbied for exemptions that would directly benefit the company - a conflict he did not publicly disclose. Meanwhile, Mistral argued that strict regulation would force European companies to partner with US tech giants, while secretly negotiating a deal with Microsoft that was announced in February 2024. The campaign succeeded: the final AI Act gave broad exemptions to open-source models and general-purpose AI, with only minimal transparency obligations. Fundamental rights checks were removed, and foundation model requirements were significantly weakened.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| AI Oversight | -against | primary | -1.00 |
| Deceptive Lobbying | +toward | secondary | -0.50 |
| Regulatory Capture | +toward | secondary | -0.50 |
| Revolving Door | +toward | primary | -1.00 |
| Undisclosed Conflicts | +toward | primary | -1.00 |
| Overall incident score = | -1.376 | ||
Score = avg(topic contributions) × significance (critical ×2) × confidence (0.86)
Evidence (5 signals)
Lobbied aggressively against EU AI Act provisions, called for moratorium
Mistral AI actively lobbied to weaken EU AI Act provisions. CEO Arthur Mensch called the AI Act 'far from ideal' and argued regulation should target applications, not base models. Co-founder Cédric O (France's former digital minister) warned the AI Act 'could kill Mistral.' In 2025, Mensch joined French executives calling for a moratorium on the AI Act. This revolving door relationship raised conflict of interest concerns.
Argued regulation would force US partnerships while secretly negotiating Microsoft deal
Mistral AI lobbied against EU AI Act provisions partly by arguing that strict regulation would force European companies to partner with US tech giants. However, the company was simultaneously negotiating a partnership with Microsoft during this period. Microsoft president confirmed the talks took 'some months of work' - overlapping with the lobbying period. When the Microsoft partnership was announced in February 2024, MEPs expressed fury at the contradiction.
Lobbying succeeded in removing fundamental rights checks and weakening AI Act oversight
Mistral AI's lobbying campaign achieved significant weakening of the EU AI Act. The final agreement gave broad exemptions to open source models and general-purpose AI, with only minimal transparency obligations. Important safeguards including fundamental rights impact assessments were removed. Corporate Europe Observatory reported that Mistral had done 'the dirty work' for Big Tech companies like Microsoft and Google whose direct lobbying had waned.
Co-founder lobbied on AI regulation while holding undisclosed €23M stake in outcome
Cédric O's initial €176 investment in Mistral AI grew to approximately €23 million while he lobbied for AI Act exemptions that would directly benefit the company. He reportedly sold a portion of his shares, including close to €1 million during the lobbying period. French senators raised conflict of interest concerns, and HATVP rules forbade him from owning shares in tech companies while lobbying.
Co-founder Cédric O, France's former digital minister, immediately lobbied former colleagues on AI policy
Cédric O, France's former Secretary of State for Digital Affairs, joined Mistral AI as co-founder and lobbyist in spring 2023. He immediately began lobbying on EU AI Act provisions, including meeting with EU officials and opening Mistral's Brussels lobbying office. The French High Authority for Transparency in Public Life (HATVP) had forbidden him from lobbying former colleagues, raising regulatory compliance concerns.