NestAI, a Finnish startup, has secured €100 million in funding and entered a strategic partnership with Nokia to advance artificial intelligence for defense-grade autonomous systems, including unmanned vehicles and command-and-control software. This collaboration places NestAI at the forefront of Europe’s efforts to develop “physical AI”—AI systems capable of operating effectively under real-world challenges and resisting intentional interference.
The funding round was led by Finland’s sovereign investment fund Tesi, with Nokia also contributing, highlighting a patriotic drive to develop dual-use technology beneficial to both allies and the Finnish Defence Forces. The capital will support the establishment of Europe’s leading physical AI lab, expanding talent in robotics and edge AI inference, and accelerating trials of autonomy stacks for land, air, and maritime domains. This €100 million raise, equivalent to approximately $110–115 million, stands out in a generally tight venture market and signals increasing European appetite for sophisticated defense technology investments.
Physical AI refers to integrating models—often large language or multimodal systems—within machines that perceive, decide, and act in real time. In defense, this means enabling drones to fly under GPS jamming, allowing ground vehicles to manage difficult terrains, and synthesizing sensor data for commanders without continuous human input. This capability goes beyond cloud-based AI; it requires powerful edge computing under strict power, size, thermal, and safety constraints, with resilience to degraded communications and adversarial conditions like electronic warfare.
Nokia complements NestAI’s ambitions by providing expertise in secure, reliable, mission-critical connectivity with private 4.9G/5G networks, edge computing, and networks designed to withstand interference. Nokia’s experience in private wireless deployments in industrial settings aligns directly with defense needs, ensuring the communication backbone can support low-latency, prioritized, and guaranteed links for autonomous systems. Finland’s deep radio engineering expertise, including legacy assets like Nokia Bell Labs and 6G research hubs, further enhances this partnership, enabling rapid on-vehicle AI inference and secure command-and-control networks.
The wider European defense landscape, shaped by sharply increasing defense budgets since Russia’s invasion of Ukraine, prioritizes air defense, long-range fires, and rapidly deployable autonomous systems. Key policy support includes the European Defence Fund’s €8 billion R&D investment through 2027 and NATO’s €1 billion Innovation Fund focusing on dual-use deep tech. European defense players are racing to deliver AI-driven situational awareness, electronic warfare, and autonomy solutions that meet sovereignty and interoperability requirements, aligning with NestAI’s Finland-first approach to control data, supply chains, and exportability.
NestAI’s leadership combines expertise in silicon, software, and systems integration, with founder Peter Sarlin—previously of Silo AI—serving as chairman while the startup recruits a CEO. The company maintains strong compliance and governance frameworks in line with European ethical and legal standards, including adherence to export controls and human-on-the-loop doctrines. Near-term plans include field trials with Finnish units, private 5G integration tests, and demonstrations showing measurable improvements in mission efficiency, detection rates, and operational logistics, alongside alignment with NATO’s technical standards.
In summary, this €100 million investment and Nokia partnership establish NestAI as a cornerstone of Europe’s pursuit of defense-grade autonomy. If successful in commercializing their physical AI technology and delivering certifiable systems, NestAI could become a critical provider of sovereign AI capabilities that European militaries increasingly require.
