OVHcloud acquires Dragon LLM: Octave Klaba's audacious gamble to build a sovereign European AI

For years, OVHcloud played an infrastructure role, providing servers, cloud services, and computing power. While the AI models ran at OVH, they actually came from elsewhere. With the acquisition of the Parisian startup Dragon LLM, announced on March 25, 2026, this positioning is changing.

Dragon LLM: 15 Years of Work Behind a Little-Known Name

The company was founded in 2011 by Olivier Debeugny under the name Lingua Custodia. It specializes in machine translation for the financial sector. By winning the Large AI Grand Challenge launched by the European Commission, the company pivoted towards large language models.

This allowed her to access several million hours of computing time on the Leonardo (Italy) and Jupiter (Germany) supercomputers. Thanks to this work, she developed an architecture called Dragon, unveiled in October 2025. It is based on a hybrid Mamba-Transformer design. This technical choice is significant, as it allows for the processing of longer contexts while consuming much less energy than a conventional transformer. The flagship model is an SLM with 3.6 billion parameters, capable of running locally on a simple PC or a server without a GPU. In November 2025, Dragon LLM published two Open Finance LLMs on Hugging Face, based on Llama 3.1 and Qwen 3, co-developed with Agefi and supported by Bpifrance, available in commercial versions ranging from 12 to 70 billion parameters. Why did OVHcloud need this acquisition? Octave Klaba, who returned to the helm of OVHcloud last November for a minimum of 5 years, was explicit at the group's annual summit. According to him, LLMs would become an omnipresent layer on top of all business applications. The question was therefore not whether OVHcloud should integrate generative AI into its value proposition, but how far up the chain.

The group had already laid some groundwork with a partnership with SambaNova for large-scale inference in November 2025, and the launch of AI Endpoints in April 2025 to access ready-to-use models via API. Dragon LLM completes this setup with the missing piece: personalization and fine-tuning.

The AI Lab: A New Weapon Against Big Tech

This acquisition triggers the official creation of OVHcloud's AI Lab, a division dedicated to training and fine-tuning sovereign LLMs. The target market is clearly identified (finance, healthcare, public sector); in other words, all stakeholders subject to strict regulatory constraints (GDPR, future AI regulations) who cannot entrust their data to models hosted on US servers subject to the Cloud Act. The objective is therefore to reduce dependence on the US. The acquisition price was not disclosed.