Mistral AI is growing in France, but there is debate over how to tax innovators

Mistral, the Paris-based company that develops AI models and which Europe regards as its greatest hope in the sector, announced yesterday that it had raised €3 billion in its Series D funding round (the fourth round of investment for established companies seeking further expansion).

The operation was led by the South Korean firm Samsung, alongside the American fund PSG Equity – already a shareholder – and, above all, the Scaleup Europe Fund, namely the European Commission’s fund through which the EU has invested in a European technology leader via EQT (a Swedish investment firm that decides independently, without individual approvals from Brussels, where to invest). Scaleup is, in fact, one of Europe’s responses to the recommendations of the Draghi report, which in 2024 highlighted how, given the difficulty of raising capital in Europe, European tech companies are relocating to the United States in order to grow, where finding investors is much easier.

With this latest fundraising round, Mistral is now worth more than 21 billion euros, almost double last year’s figure (11.7 billion) at this time of year, when it had become, in the eyes of liberal-progressives such as the Nobel laureate in economics Philippe Aghion, the prime example to illustrate the damage that the Zucman tax could cause to French – and therefore European – innovation: an annual tax of 2 per cent on assets exceeding 100 million, even on those holding shares in a company that has not yet made a single euro. This would have applied to tech start-ups as well, therefore. The proposal was rejected last year by the National Assembly, and with that tax in place, Mistral might not have doubled its value, because to settle its accounts with the state – given that last year the company was not yet generating a single euro (it is expected to have a turnover of one billion in 2026) – its founder, Arthur Mensch, would have had to sell part of his shares – perhaps outside the EU – to the detriment of the whole of Europe. Or hand them over to the state, as proposed by the architect of the tax, the economist Gabriel Zucman: an expropriation.

This year, French Prime Minister Sébastien Lecornu intends to avoid bringing the Zucman tax back into the debate – leaving the issue to be discussed by the candidates in next year’s presidential election – and is focusing on fiscal stability. Given France’s difficult circumstances, this means aiming for a deficit of 5 per cent. To achieve this, however, a political agreement will be necessary—something that proved elusive in 2025: France only managed to pass the budget in February 2026, and began the year by resorting to the emergency measure of the loi spéciale (a sort of stopgap measure).

Nevertheless, the wealth tax on the super-rich is set to become the uninvited guest at the 2027 election. Zucman is certain of this. He told La Croix that the tax “will eventually be adopted”. The left, from Olivier Faure’s Socialist Party to Jean-Luc Mélenchon’s France insoumise, has made it a key issue. Aghion, seeking to pre-empt the ideological debate, has proposed a compromise on large fortunes: together with other economists, on 31 August in Les Echos, he revived a proposal for inheritance tax relief for those who voluntarily donate part of their estate to freely chosen foundations that fund innovation, research and reindustrialisation. Aghion calls this ‘mécénat forcé’ – forced patronage.

Meanwhile, Mistral’s CEO has already made it clear where the 3 billion raised will go: rice, chips and data centres, to bring AI into European factories, from Airbus to ASML. However, this single success story does not eliminate the underlying problem: Europe lacks a genuine AI industry. This was emphasised by the French Minister for the Economy, Roland Lescure: European sovereignty in AI requires an ecosystem of companies that cannot depend solely on Mistral. The 5 billion euro Scaleup fund, announced by von der Leyen, is not enough. To compete with American giants such as Anthropic, which is valued at $965 billion and raises as much as $60 billion in a single funding round, more is needed. Perhaps this is why Mario Draghi, disappointed by the delays in implementing the reform agenda, launched the Rhine Group, a think tank of economists and tech start-up founders, to make Europe an ecosystem conducive to innovation.