Finland-based AI startup NestAI has raised an impressive €100 million (approximately $115 million) in fresh funding to accelerate the development of “physical AI” systems tailored for defense and autonomous technologies. The round was led by Tesi, Finland’s sovereign wealth fund, along with major participation from Nokia, signaling growing national interest in homegrown AI innovation that supports Europe’s defense and technological sovereignty.
Announced at Slush 2025 in Helsinki, the funding marks a significant milestone for NestAI, which aims to build Europe’s leading physical AI lab. Co-founder Peter Sarlin described the initiative as a crucial step toward boosting Europe’s capabilities in robotics, unmanned vehicles, autonomous operations, and command-and-control platforms.
Physical AI refers to the integration of large language models and generative AI with robotics and real-world hardware an area rapidly expanding as global demand for autonomous defense systems grows.
NestAI also revealed a strategic partnership with Nokia, combining the startup’s AI research with Nokia’s extensive hardware and network expertise. Together, they will develop advanced AI tools for defense applications, including autonomous maneuver systems and next-generation battlefield intelligence solutions.
With Europe facing heightened security concerns due to the ongoing Ukraine–Russia war, the collaboration aligns with the continent’s urgent push for technological self-reliance.
The startup has been operating mostly in stealth mode, but its focus on national security has quickly brought it into the public spotlight. Last month, NestAI announced support for the Finnish Defense Forces in their efforts to adopt AI systems further reinforcing its strategic role in Finland’s defense modernization.
Sarlin, who previously sold his AI company Silo AI to AMD for $665 million, has been funding NestAI through his family office PostScriptum. While he will serve as chairman of NestAI, he will not take on the CEO role and will continue his primary position at AMD. The company is currently searching for a CEO to lead its expanding operations.
NestAI’s growing team includes former experts from Intel, Kongsberg, Palantir, Saab, and other major defense and AI hardware players. Their combined experience strengthens the company’s ability to build cutting-edge solutions in a domain where reliability, speed, and precision are critical.
As Europe accelerates AI adoption for defense and strategic autonomy, NestAI’s €100 million raise and partnership with Nokia could position it as a central force in shaping the continent’s next generation of physical AI and autonomous defense technologies.
