June 11 (Reuters) - France's Mistral AI has raised 600

million euros ($643.7 million) in a funding round led by

existing investor General Catalyst, it said on Tuesday, as AI

continues to draw the bulk of technology-focused venture capital

funds.

The Series-B funding round valued the one-year-old company

at 5.8 billion euros, according to two sources directly involved

with the deal. This is a sharp increase from its valuation of 2

billion euros during its prior funding round in December.

"This new round puts us in a unique position to push the

frontier of AI and bring state-of-the-art technology to

everyone's hands," co-founder and CEO Arthur Mensch said.

The latest round also included investments from firms such

as Lightspeed, Andreessen Horowitz, Cisco Systems ( CSCO ) and

Nvidia ( NVDA ), bringing the AI startup's total funding to more

than 1 billion euros.

The runaway success of OpenAI's ChatGPT following its launch

in late 2021 has turned the spotlight on large language models

(LLM), a technology that underpins generative artificial

intelligence products.

Paris-headquartered Mistral, widely considered as OpenAI's

European competitor, said it would use the proceeds to add

computing capacity, recruit workers and expand its international

presence, particularly in the U.S.

In February, Microsoft ( MSFT ) invested $16 million in

Mistral as part of a partnership to make the company's AI models

available through its Azure cloud computing platform.

The partnership attracted scrutiny from the European Union,

with lawmakers demanding an investigation into what they see as

concentration of power by the tech giant.

($1 = 0.9321 euros)