Finnish startup NestAI just closed a €100 million funding round led by Nokia and Finland's sovereign fund Tesi, marking one of Europe's largest defense AI investments this year. The deal positions NestAI to build what co-founder Peter Sarlin calls "Europe's leading physical AI lab" at a time when the continent is scrambling to develop homegrown defense technologies amid the ongoing Ukraine-Russia conflict.
NestAI just became one of Europe's best-funded defense AI startups, pulling in €100 million from an unlikely alliance of corporate and sovereign money. The Finnish company's funding round, led by hardware giant Nokia and Finland's state investment fund Tesi, signals how seriously European governments are taking the race for defense AI supremacy.
The timing isn't coincidental. As the Ukraine-Russia war drags into its third year, European nations are pouring money into homegrown defense technologies to reduce dependence on American suppliers. NestAI is betting it can capture this moment with what it calls "physical AI" - essentially large language models that can control real-world military hardware like drones, autonomous vehicles, and command systems.
"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," co-founder Peter Sarlin told TechCrunch. The partnership "marks an important step in securing Europe's defense capabilities and sovereignty."
Sarlin knows a thing or two about building AI companies that attract big exits. He previously founded Silo AI, which AMD acquired for $665 million last year. Now he's funding NestAI through his family office PostScriptum while keeping his day job at AMD. He'll serve as chairman rather than CEO, though the company hasn't named a chief executive yet.
The Nokia partnership goes beyond just funding. The Finnish telecom giant will work with NestAI to develop AI products specifically for defense applications, leveraging Nokia's hardware expertise and NestAI's AI capabilities. It's a strategic marriage that could help both companies compete against American defense contractors like Palantir and Anduril, which have dominated the AI-powered defense market.
Physical AI represents the next frontier beyond traditional chatbots and language models. Instead of just processing text, these systems need to understand and manipulate the physical world through robotics, sensors, and autonomous systems. The technology is particularly valuable for military applications where human operators can't safely deploy.
