Nokia, NestAI Forge Defense AI Alliance with €100M Investment

Nokia and NestAI have announced a strategic partnership coupled with a significant €100 million investment from Nokia and the Finnish sovereign fund Tesi, signaling a pivotal move to accelerate physical AI innovation within the defense sector. This collaboration is set to drive the development of advanced AI-powered solutions for critical infrastructure and national security, leveraging Nokia's secure connectivity expertise with NestAI's cutting-edge AI platforms.

The alliance positions Nokia, a global leader in AI-era connectivity, to deepen its engagement in defense technology through its newly launched defense incubation business unit. NestAI, recognized as one of Europe's fastest-growing physical AI labs, focuses on creating next-generation AI for unmanned vehicles, autonomous operations, and command and control (C2) platforms across various domains including logistics, inspection, surveillance, and defense.

Accelerating Physical AI Innovation for European Security

The strategic rationale behind this substantial investment underscores a broader push for AI-native dual-use technologies in defense. Nokia's decision to launch a dedicated defense incubation unit, with a focus on co-innovation with partners in the U.S., Finland, and other NATO and Five Eyes countries, highlights the increasing recognition of connectivity as a strategic asset for AI-driven decision-making in defense. The €100 million combined investment from Nokia and Tesi will specifically bolster NestAI's capacity to deliver mission-critical physical AI innovation at scale.

Justin Hotard, President and CEO at Nokia, emphasized the company's vision: “At Nokia, we believe that the future of defense and critical infrastructure will be defined by secure, AI-native solutions. Our strategic partnership with NestAI is a testament to our commitment to innovation with partners. By combining Nokia’s expertise in secure advanced connectivity with NestAI’s pioneering platforms, we are accelerating the development of next-generation capabilities for defense and national safety.” This sentiment reinforces the urgent demand for integrated, secure AI solutions in a rapidly evolving geopolitical landscape.

Peter Sarlin, Chairman of NestAI and PostScriptum, echoed this strategic imperative, stating, “Strategic partnerships are imperative to strengthen Europe’s security and resilience. In line with PostScriptum’s mission, NestAI was founded to deliver mission-critical physical AI capabilities at scale and to safeguard Europe’s sovereignty. Nokia’s role as a cornerstone of leading global technology and innovation enables us to accelerate our impact and deepen the operational advantage NestAI brings to European defense.” The collaboration aims to secure Europe’s technological edge and ensure resilient leadership in advanced defense capabilities.

Tesi, the Finnish sovereign fund, views its investment as a cornerstone of its renewed strategy to support Finnish companies with significant potential in strategically important sectors. Juha Lehtola, Head of VC & Growth investments at Tesi, noted, “We see NestAI emerging as a foundational technology partner for mission-critical defense and security environments across Europe. Our investment reflects the value it is already demonstrating for organizations facing increasingly complex and evolving operational demands.” The institutional stability provided by Tesi is intended to foster long-term technological leadership and provide substantial returns.

Defense AI Collaboration Bolsters Autonomous Capabilities

The partnership between Nokia and NestAI is explicitly designed to jointly innovate defense-focused, AI-native solutions. This involves merging Nokia’s proficiency in secure, AI-native connectivity, sensing, and multimedia with NestAI’s platforms for unmanned systems, C2 systems, and next-generation AI. The companies will leverage their combined engineering and R&D strengths to accelerate the integration of AI capabilities into unmanned systems, data-centric C2, and modern information management. This defense AI collaboration will further solidify relationships with European defense forces and other strategic partners.

The market implications of this alliance are significant. As defense forces worldwide increasingly seek robust, intelligent, and autonomous systems, the demand for sophisticated physical AI solutions is surging. The ability to deploy AI in mission-critical environments, from autonomous logistics to advanced surveillance, offers substantial operational advantages. This partnership underscores a broader trend where traditional telecommunications giants are expanding their footprint into specialized defense technology, driven by the convergence of connectivity and artificial intelligence.

The move by Nokia, a company long associated with global communication infrastructure, into dedicated defense AI solutions, signals a strategic pivot towards high-growth, high-stakes sectors where its core competencies in secure networking are paramount. The collaboration with NestAI is not just an investment but a synergistic effort to shape the future of defense and national safety through cutting-edge, AI-driven technologies, ensuring both innovation and sovereignty for European interests in a competitive global arena.