Elon Musk's xAI has held discussions with Paris-based AI developer Mistral AI about a potential partnership, according to reports. The talks reportedly included exploring a three-way collaboration with Cursor, the San Francisco code-editing startup that SpaceX announced plans to acquire for $60bn earlier this week.

xAI, the company behind AI chatbot Grok, was acquired by SpaceX in February for $250bn. Mistral, founded in 2023, has become one of Europe's most valuable AI startups, reaching an €11.6bn valuation and positioning itself as one of the region's few competitors against US Big Tech in the field.

Musk proposed the partnership as part of xAI's efforts to catch up with fast-growing competitors like OpenAI and Anthropic. Anthropic was recently reported to have surged to a trillion-dollar valuation on secondary markets, while OpenAI raised $122bn at an $852bn valuation last month. xAI is building the Colossus supercomputer in Memphis but reportedly lost $6.4bn in 2025, up from $1.56bn in 2024.

Since launching in 2023, Mistral has raised nearly €2.8bn ($3.2bn), including a €1.7bn Series C led by ASML. Former Mistral founding team member Devendra Chaplot joined xAI as a member of technical staff two months ago, highlighting the intensifying talent competition in the AI sector.