Microsoft and Mistral have expanded their strategic partnership to focus on where AI models run and who controls the infrastructure, not just which model is chosen. The partnership brings Mistral models across Microsoft Foundry, Copilot Studio, and Azure, while expanding AI compute infrastructure in Europe and supporting deployment models ranging from public cloud to customer-controlled and fully disconnected environments. The companies announced that Mistral Medium 3.5 and OCR 4 are now available in Microsoft Foundry, and Mistral Medium 3.5 is available in Microsoft Copilot Studio. The partnership aims to address varying requirements for data residency, operational control, connectivity, resilience, and regulatory compliance across different workloads, such as customer-facing applications versus manufacturing or healthcare processes. Microsoft is positioning Foundry and Foundry Local as a common platform approach, allowing organizations to develop applications using the same models, tools, APIs, and workflows across environments. Azure supports cloud-based deployments, while Azure Local extends the development and runtime environment to customer-controlled locations, and the companies also support fully disconnected environments.