Finland’s NestAI is building the AI layer Europe’s militaries want to own

A Helsinki lab barely a year old, bankrolled by Nokia and the Finnish state, is now writing battlefield software with two defence ministries. The technology matters less than who controls it.

On the last day of June, officials from Finland’s Ministry of Defence, the Estonian Defence Forces, and a Helsinki AI lab founded only last year signed a document that commits none of them to spend a single euro. The letter of intent contains no financial commitments at all, a fact the Finnish Defence Forces stated plainly in its own announcement.

It is, on paper, one of the least consequential things a defence ministry can put its name to. It is also, in the current European mood, one of the more revealing.

The letter ties the Finnish Defence Forces’ AI Centre of Excellence to Estonia’s Force Transformation Command, with NestAI as the industrial partner, and sets out a framework for knowledge sharing, joint development, training, and technical cooperation. Procurement is not mentioned. What is being negotiated here is not a contract but a habit.

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NestAI itself is scarcely older than the agreement. Founded in 2025, it now employs close to 200 engineers and scientists, and in November it raised €100m from Nokia and Tesi, the Finnish state investment company. That is enough to make it one of the better-capitalised physical-AI labs on the continent before most people outside Helsinki had heard of it.

The product is called NestOS, and the pitch is unusually legible for the sector. It is an operating layer for unmanned vehicles and command-and-control systems, built on open, modular architectures, and designed to keep learning after it has been fielded rather than freezing at the moment of delivery.

“European defence forces need AI systems that work together across national boundaries and continue to learn after deployment,” said Peter Sarlin, NestAI’s executive chairman. Capability evolution, he added, should stay “in the hands of the nations who operate the systems.”

That clause is the entire argument. Open and modular is not an engineering preference here, it is a procurement doctrine: no single vendor gets to own the roadmap, and each country keeps sovereign control of its own data. Europe has spent three years discovering how uncomfortable it is to run critical infrastructure on someone else’s terms.

The first work strands are adaptive and learning AI, decision support for command and control, and autonomous and unmanned systems. Piloting comes first, with the participants due to identify focus areas, run them, then assess what worked before any wider expansion. In the longer term the intention is to pull in AI organisations, centres of excellence, and industry partners from other nations.

Major General Sami Nurmi, deputy chief of staff for strategy at Defence Command Finland, placed the letter inside the Finnish Defence Forces’ data and AI strategy, launched last year, and said the aim is to bring further nations into the arrangement.

His Estonian counterpart, Major General Viktor Kalnitski, said the integration of operational insight and technical expertise should accelerate the responsible adoption of AI in command and control, unmanned systems, and adaptive decision support.

The commercial side is moving faster than the diplomatic one. On 9 July, Nokia Defense and NestAI unveiled a joint capability for what the industry politely calls denied environments, meaning places where satellite navigation is jammed, bandwidth collapses, and autonomous systems have to keep working anyway.

It is the first operational output of the Nokia partnership, and it lands in a market that has been rewarding European defence tech at a pace that would have looked deranged in 2021.

NestAI is not the largest player in that market, or the loudest. Munich’s Helsing, valued at $18bn in its most recent round, has spent the past year building an alliance with Mistral on military AI, and NATO has its own sensor-fusion programme running along the eastern flank. NestAI works with the Finnish Defence Forces and lists Patria and Bittium among its industry partners.

What it has instead is proximity. Finland shares 1,340 kilometres of border with Russia, and Estonia sits on the other side of the Gulf, which tends to concentrate the mind about who writes the software and where the weights are stored.