French start-up Mistral AI announced on Monday it was launching a new chatbot, in a race to catch-up with US counterparts like OpenAI, the maker of ChatGPT.
Mistral, formed last year by ex-Google and Meta researchers, has already raised almost 500 million euros ($540 million).
Certain investors valued the company at more than $2.0 billion in December, leading to frenzied speculation about it becoming a future European tech champion.
On Monday the firm announced an improved language model -- the term AI firms use to describe the programmes they build apps on -- as well as its first chatbot, called "Le Chat".
Mistral's earliest customers would be given access to the bot for testing, before it was released more widely, it said.
"Le Chat is natively multilingual and offers a pedagogical and fun way to explore Mistral AI's technology," the firm said in a statement in English.
Among European AI firms, only Germany's Aleph Alpha brought in as much funding as Mistral last year.
OpenAI has attracted billions in investment from Microsoft and is closely tied in with the software giant's services.