Dutch semiconductor tooling supplier, ASML announced that the firm is investing $1.5 billion in the French GenAI company, Mistral. As a result, ASML will have gain a board seat. When this new investment is factored in, Mistral may now be worth $11.7 billion. According to Seeking Alpha:

Mistral was valued at more than $6 billion after its Series B round last year. Reports in recent weeks have suggested the latest financing could lift its valuation as high as $14 billion.

So, why is this happening? ASML makes extreme ultraviolet lithography (EUV) technology that goes into producing most modern, smaller fabricated chips for customers as TSMC, Samsung, Nvidia, and other top chip makers in the modern AI data center arena. Like most business strategies, the investment could (and likely is) multifaceted.

It could be that ASML wants to be in more control of its end-to-end verticals–that is what the end customers are doing. ASML does not make chips themselves but think of them as the company that makes the tools that makes the chips, that go into the data centers, that support GenAI firms.

We can also consider due to American-led tariffs, especially on semiconductors, that ASML wants to bring European tech assets under more control to shorten the supply chain between them. Domestic politics within the EU also make this an interesting play.

European customers are keener on keeping their own data away from American or Chinese servers, so this allows more data sovereignty to appease regulators and comfort Mistral’s customer base. In addition, it could just be a diversified investment opportunity. Nvidia already put a $6 billion investment into Mistral some time ago.

Lastly, Mistral itself, could provide useful data back to the original supplier about how better to serve its semiconductor and to an extent, endpoint GenAI customers to make improved technologies, understand what these biggest customers and consumers of data centers ultimately require, and crate efficiencies in the total supply chain where needed.

Energy consumption and data center costs are two headwinds currently amplified when making infrastructure buildout to support the ever-growing demand of GenAI firms. Technology firms have always thrived on ecosystem development. This would go a long way in building out those systems to keep Mistral competitive in this environment.