Finnish Startup NestAI Raises €100M in Partnership with Nokia for Defense-Focused Physical AI
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Finland's NestAI lands €100M, partners with Nokia to build AI for defense applications
Finnish startup NestAI has raised €100 million (about $115 million) in a funding round led by Finland's sovereign fund, Tesi, and hardware giant Nokia to build AI products for use in unmanned vehicles, autonomous operations, and command and control platforms. NestAI has also struck a partnership with Nokia to build AI products for defense applications and develop "physical AI," which involves using large language models and related technology for robotics and other real-world applications. The funding will help NestAI build "Europe's leading physical AI lab," co-founder Peter Sarlin said at the Slush 2025 technology conference in Helsinki. Physical AI has been a growing research field both for Big Tech and startups, and NestAI's funding round shows there's space for European companies to develop homegrown solutions to address the continent's needs -- which have leaned towards defense applications due to prolonged Ukraine-Russia war. Last month, the startup announced it would support the Finnish Defense Forces in adopting AI. This focus on sovereignty may explain why NestAI has been in stealth so far, but it is now building in public, supported by Sarlin, who has been funding the venture for the past few months through his family office, PostScriptum. "In line with PostScriptum's mission, NestAI has from the start set out to become Europe's leading physical AI lab to drive technological sovereignty," Sarlin told TechCrunch. "This partnership also marks an important step in securing Europe's defense capabilities and sovereignty." After selling AI startup Silo AI to AMD for $665 million last year, Sarlin has been active as a philanthropist and investor, backing startups like Legora and Lovable. While he's building NestAI, his day job is still at AMD, and he will only act as the startup's chairman, not its CEO. NestAI doesn't have a CEO yet, but its growing team has attracted talent with experience in AI research and hardware projects that overlap with defense. A significant number of its staff formerly worked for Intel, while others were formerly employed by the likes of Kongsberg, Palantir and Saab.
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Nokia Deepens AI Ambitions With NestAI Partnership - Nokia (NYSE:NOK)
Nokia Oyj (NYSE:NOK) and NestAI have entered into a strategic alliance, supported by a combined 100 million euro ($115.3 million) investment, aimed at strengthening European innovation in AI-driven defense and critical infrastructure technologies. The announcement, made from Espoo, Finland, highlights both companies' plans to scale next-generation platforms for unmanned systems and command-and-control solutions. NestAI has rapidly expanded in Europe, focusing on physical AI technologies such as autonomous operations, logistics, surveillance, and defense applications. The new backing from Nokia and Finnish sovereign investor Tesi (Finnish Industry Investment Ltd) is expected to accelerate the development of advanced AI-native platforms designed for mission-critical environments. Also Read: Nokia Secures Multi-Year Pact To Power Telecom Italia's 5G Expansion Nokia has recently established a defense incubation unit to deepen collaborations with partners across the U.S., Finland, and allied nations. Through this partnership, Nokia contributes secure connectivity, sensing, and multimedia capabilities, complementing NestAI's unmanned systems and AI platforms to support evolving defense and security requirements. Justin Hotard, President and CEO of Nokia, said the collaboration reflects a joint commitment "to shape the future of AI-driven solutions" for national safety and infrastructure. Additional industry movement around Nokia includes recent restructuring updates tied to profit targets, which drew investor attention as shares reacted to restructuring plans. The broader defense and connectivity space continues to attract investment as AI integration expands across global operations. Price Action: NOK shares are trading 1.33% higher at $6.11 premarket at the last check on Thursday. Read Next: HUMAIN Expands Nvidia Alliance To Bring Advanced Arabic AI To The Masses Image: Shutterstock NOKNokia Oyj$6.121.45%OverviewHONHoneywell International Inc$191.430.45%ITAiShares U.S. Aerospace & Defense ETF$206.091.46%LMTLockheed Martin Corp$472.150.48%XLKSPDR Select Sector Fund - Technology$287.352.27%Market News and Data brought to you by Benzinga APIs
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Finnish AI startup NestAI has secured €100 million in funding from Nokia and Finland's sovereign fund to develop physical AI solutions for defense applications, including unmanned vehicles and autonomous operations, marking a significant push for European technological sovereignty.
Major Funding Round Signals European AI Ambitions
Finnish AI startup NestAI has successfully raised €100 million (approximately $115 million) in a significant funding round that positions the company as a key player in Europe's push for technological sovereignty in defense applications
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. The funding round was led by Finland's sovereign fund Tesi (Finnish Industry Investment Ltd) and telecommunications giant Nokia, marking a strategic alliance aimed at developing next-generation AI solutions for critical infrastructure and defense applications2
.Physical AI Focus for Defense Applications
NestAI specializes in "physical AI," a rapidly growing field that involves applying large language models and related technologies to robotics and real-world applications. The company's primary focus areas include unmanned vehicles, autonomous operations, command and control platforms, logistics, and surveillance systems
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. This technology represents a significant advancement beyond traditional AI applications, bridging the gap between digital intelligence and physical world operations.The startup has already begun supporting the Finnish Defense Forces in adopting AI technologies, demonstrating the practical application of their solutions in real-world defense scenarios
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.This early adoption by national defense forces validates the company's approach and technology capabilities.
Strategic Partnership with Nokia
The partnership between NestAI and Nokia extends beyond financial investment to include collaborative development of AI products specifically designed for defense applications. Nokia contributes its expertise in secure connectivity, sensing, and multimedia capabilities, which complement NestAI's unmanned systems and AI platforms
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. This collaboration represents Nokia's deeper commitment to AI-driven solutions, with the company recently establishing a defense incubation unit to strengthen partnerships across the United States, Finland, and allied nations.Justin Hotard, President and CEO of Nokia, emphasized that the collaboration reflects a joint commitment "to shape the future of AI-driven solutions" for national safety and infrastructure
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. The partnership is designed to scale next-generation platforms for unmanned systems and command-and-control solutions, addressing evolving defense and security requirements.Related Stories
Leadership and European Sovereignty
NestAI co-founder Peter Sarlin announced at the Slush 2025 technology conference in Helsinki that the funding will help build "Europe's leading physical AI lab"
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. Sarlin, who previously sold AI startup Silo AI to AMD for $665 million, has been funding NestAI through his family office PostScriptum while maintaining his day job at AMD. He will serve as the startup's chairman rather than CEO, with the company still searching for a chief executive.The focus on European technological sovereignty appears to be a driving force behind NestAI's mission, particularly relevant given the prolonged Ukraine-Russia conflict that has heightened Europe's awareness of defense technology needs .
This emphasis on sovereignty may explain why NestAI operated in stealth mode until now, but the company is transitioning to building in public with this significant funding milestone.
Talent Acquisition and Market Impact
NestAI has assembled a team with extensive experience in AI research and hardware projects that align with defense applications. A significant portion of the staff previously worked at Intel, while others bring experience from defense and technology companies including Kongsberg, Palantir, and Saab
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. This talent concentration demonstrates the company's ability to attract experienced professionals in the competitive AI and defense technology sectors.The funding round and partnership announcement had an immediate positive impact on Nokia's stock performance, with shares trading 1.33% higher at $6.11 in premarket trading
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. This market response reflects investor confidence in the strategic value of the partnership and Nokia's expanding AI capabilities.References
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