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    • Category: Energy

    • Mistral Under Microsoft: Europe’s AI Catch-Up Challenge Remains Unresolved

      Mistral Under Microsoft: Europe’s AI Catch-Up Challenge Remains Unresolved

      Mistral AI’s move into Microsoft’s sphere has sparked political criticism in Europe. As a champion of open source, the company had recently advocated for a more flexible AI Act before announcing its shift to a closed model. Nevertheless, its technical success in developing foundational models with limited resources demonstrates Europe’s—and other global players’—potential to catch up. However, achieving true autonomy would still require overcoming a difficult economic equation that pushes the most promising startups into the arms of Big Tech.

      Mistral’s Success Highlights Europe’s Technical Potential in the AI Race

      Many observers had assumed Europe was destined to remain merely a user of American AI models for developing various applications. Technically, Mistral’s success confirms the opportunity for a relatively resource-efficient AI compared to Big Tech’s massive data usage and financial and human resources.

      In just a few months, Mistral managed to develop AI models that rival OpenAI, Google, and Meta in performance, with significant but far more limited resources than those of the American giants. This is particularly striking in terms of workforce, with its team of around thirty employees. This achievement not only showcases the team’s prowess but also sheds light on the nature of the technology driving the generative AI boom.

      Beyond new neural network architectures (like transformers), the spectacular progress in AI over the past decade has largely been due to the use of enormous amounts of data and computing power. While riding this wave of quantitative explosion, Mistral has also carved out a path for more refined AI engineering, allowing it to establish itself on the global stage in record time.

      Even amid an educational crisis and severe deindustrialization, it remains possible to mobilize skills from top-tier training programs to compete with global tech giants. Beyond the issue of European autonomy, this technical reality offers valuable lessons about the global AI race. Catching up and competing in AI is possible, provided there is sustained funding and market opportunities.

      Mistral’s Move into Microsoft’s Sphere Illustrates the Economic Challenge of Independent and Open AI

      After positioning themselves as champions of open, reusable models, Mistral’s leaders decided that their new, most advanced model would be closed—distributed through an agreement with Microsoft, which is also taking a stake in the company. The open-source approach had boosted Mistral’s appeal among developers, alongside other open models like Meta’s LLaMA, in contrast to the now radically closed model of the misnamed OpenAI.

      In fact, it was precisely this shift that led Elon Musk, who had been involved in OpenAI’s launch, to recently announce legal action against Sam Altman’s company. Beyond the irony of the billionaire’s outbursts, it is true that OpenAI, with its labyrinthine structure, reflects a gap between its original open-source and research-focused mission and its current purely commercial purpose. The issue of Big Tech’s grip on AI is particularly sensitive for Europe but is also relevant in the United States.

      Like OpenAI, Mistral’s agreement with Microsoft confirms its technical success and popularity. The French company is also launching a chatbot called “Le Chat,” modeled after ChatGPT. However, this partnership, for now, buries the dream of an independent, open-source European AI.

      Beyond the recent virulent attacks on the company’s leadership, we must question the European economic environment. The core issue remains the prospects for development, funding, and commercial opportunities needed to maintain a leading position in the digital sector. These challenges and the financial power of tech giants inevitably draw successful startups into their orbit. It is this economic aspect that has turned Mistral’s technical feat, which could have marked a turning point toward autonomy, into a strategic setback for Europe.

      Beyond Distrust of Lobbying, a Flexible Approach to AI Regulation Remains Essential

      The AI Act addresses an obvious need for regulation and risk management in AI. However, its complicated development has resulted in particularly convoluted agreement terms. Its creators had missed the generative AI revolution and embarked on a titanic adaptation effort last year.

      The idea of positioning Europe as the world’s digital regulator, with too little concern for the continent’s technological offerings, poses an existential risk to the European economy and its competitive autonomy. Moreover, with its difficult application to future technical developments, the AI Act risks serving the interests of Big Tech, which has the means to navigate these regulatory labyrinths. Mistral’s move into Microsoft’s orbit seems to confirm this.

      Mistral had strongly advocated at the end of last year for a loosening of the AI Act, particularly regarding open-source foundational models of generative AI. It is natural to think that the company had already considered its shift to a closed model in partnership with Microsoft. Nevertheless, the concessions made in response to objections from the French and German governments, defending their national companies like Mistral and Aleph Alpha, mainly concerned open source, which will thus benefit from greater flexibility. While Mistral’s reversal may be regrettable, its lobbying primarily resulted in a loosening of the AI Act that could, under certain economic conditions, encourage the emergence of future open-source competitors.

      This piece has initially been published by the French Institute for International and Strategic Affairs – IRIS.

    • Failing to Diversify Gas: Europe’s Decades-Long Renouncement Toward Russia

      The failure to diversify natural gas sources leaves Europe without a convincing solution to such a premeditated Russian invasion of Ukraine. We find ourselves playing poker against chess players. Europe imports more than a third of its natural gas from Russia, and has given up most of its strategic leeway in this sector. Even though Europe’s political rhetoric was intended to be increasingly firm toward Russia, particularly with the idea of NATO expansion, in reality our dependence on Russia has increased year after year. This gap is exemplified by the major German-Russian agreements around Nord Stream 1, opened in 2011, then Nord Stream 2, just suspended before going into operation. The major diversification routes that Europe had been planning for since the early 2000s have been abandoned or reduced to a fraction of their original scope. The idea of a Southern Corridor from the Azeri Caspian fields as an alternative has been replaced by a gigantic northern, maritime route bypassing Ukraine, directly from Russia to Germany.

      Turning Germany into a Major Hub for Russian Gas… and Bypassing Ukraine

      In Germany, the share of gas imports from Russia is estimated at nearly half. The relative weight of Russian gas imports can vary significantly from one year to the next, and from one month to the next, but the trend has clearly been upwards over the last ten years, by more than 20% in Europe, while Norwegian production was beginning to stagnate overall. With Nord Stream 2, Germany’s dependence could have reached 70%. Nord Stream 1 has an annual capacity of 55 billion cubic meters (bcm). Nord Stream 2 was to double this capacity. 110 bcm is more than all of Germany’s natural gas consumption (about 100 bcm)! At the same time, the country has strongly developed its storage capacities. The aim was clearly to turn it into a major import-export platform for Russian natural gas, in addition to guaranteeing the country’s energy security after the end of nuclear power and satisfying Russian requirements to bypass Ukraine.

      The Southern Corridor: A Missed Opportunity for Diversification

      Alternative projects developed under the Southern Corridor framework were rightly presented as major diversification initiatives for Europe from the early 2000s until just under a decade ago. European countries, like Italy, Greece or Austria, each projected themselves, depending on the route options, as the hub of this southern route for distribution to the rest of Europe or at least its southern half.

      On the one hand, Nord Stream, this gigantic northern route, has taken its place. On the other hand, while gas from the Azeri fields in the Caspian remained an alternative, the various secondary branches to Iran and Iraq have obviously disappeared in the wake of political ruptures and security crises. It would not be surprising, however, if a new commitment to diversification quickly led to improved relations with gas giant Iran and to new agreements.

      In the end, instead of a major diversification route for Europe, the Caspian gas route has only into developed a modest interlocking of much smaller projects in Azerbaijan and Turkey, in particular, to Europe.

      Russia has sought to bypass Ukraine for a long time. Already in the days of pro-Russian Yanukovych, there were incessant disputes about the fees charged by Ukraine and even more about the share of gas taken, with Moscow regularly accusing Kiev of siphoning off Russian gas flows to Europe. While various diversification projects were on the table in Europe, this Russian plan to bypass Ukraine resonated with the German objective of guaranteeing direct access to Russian gas, even if this meant considerably weakening Ukraine.

      Energy Diversification Would Have Been More Effective than Banking Sanctions

      This long drift has resulted in a loss of strategic room for maneuver. We therefore have to focus on financial sanctions with international repercussions that are difficult to anticipate and contain, such as banning some Russian banks from the SWIFT protocol. This type of measures was designed for Iran, which was already much less inserted in world trade. Above all, these measures of financial blockade were accompanied by the equivalent isolation in trade, and energy in particular. With heavy financial sanctions against Russia, there are still channels left, if only to be able to pay for our gas imports and receive payments from Russia. These sanctions are massive as such, but because of the extent of the dependence on energy flows, they are necessarily fragmented and unevenly applied.

      The alternatives are limited in the short term. Liquefied natural gas is one of them, already accounting for slightly more than a quarter of European imports. However, the infrastructure is still quite limited, and non-existent in Germany, for example, which relies on the infrastructure of neighboring Netherlands. These take less time to build than large gas pipelines, of course, but they cannot be erected overnight. Flexible US supply has helped to increase European LNG imports. However, it is extremely difficult to overcome a tendency towards ultra-dependence in gas pipeline imports, which has developed over decades, since the days of the USSR, following long-term contracts with often opaque financial commitments. It should also be noted that Russia still accounts for 20% of the LNG imported by Europe, just behind the 26% share of the United States and 24% of Qatar…

      This piece has initially been published as an interview by Atlantico in French.