Nokia AI defence ambitions are moving from strategy slides to concrete projects, as the Finnish network company forms a dedicated Nokia Defence unit and enters a strategic partnership with domestic startup NestAI to develop AI-driven military technology for unmanned systems and command-and-control platforms.
The move, announced in Helsinki on Thursday, comes alongside a 100 million euro investment in NestAI and follows a major AI deal with US chipmaker Nvidia, signalling how Finland wants to anchor next-generation defence capabilities in its own technology ecosystem.
Why Nokia is doubling down on AI defence
The new Nokia Defence unit is part of a wider restructuring that splits the group into network infrastructure and mobile infrastructure, with AI and data centre businesses placed at the core of Nokia’s long-term growth strategy. The company has set an ambition to lift its annual operating profit significantly by 2028 and sees defence-grade connectivity as one of the segments with stable demand despite a slowdown in traditional 5G roll-outs.
In this context, the defence unit will act as an incubation hub for research, development and commercialisation of secure fixed and mobile networks tailored to military users, border security authorities and other security actors. The strategy builds on Nokia’s existing work with government customers, including US federal contracts, but gives defence activities a clearer structure and visibility inside the group.
The shift is reinforced by external capital. In late October, Nvidia agreed to invest around 1 billion dollars (about 930 million euros) for a stake of close to three percent in Nokia, in a partnership focused on AI-powered data centres and future 6G networks. By linking its telecom equipment, cloud connectivity and now dedicated defence activities to the AI boom, Nokia is positioning itself as a European alternative in a market where many of the leading suppliers are based in the United States or East Asia.
NestAI’s “physical AI” for unmanned systems and command and control
Founded with backing from investment company PostScriptum and chaired by Aalto University professor Peter Sarlin, NestAI specialises in what it calls “physical AI”: software and platforms that allow unmanned vehicles, sensors and command-and-control systems to operate autonomously in complex, contested environments. The company focuses on mission-critical applications in defence and security, where reliability and secure data handling are central requirements.
The latest funding round, worth 100 million euros, is led by state-owned investment firm Tesi together with Nokia. According to the partnership announcement, the money will be used to scale NestAI’s platforms for unmanned vehicles, autonomous operations and command-and-control systems across land, sea and air domains. Nokia contributes its expertise in secure, high-performance connectivity, from private 5G networks to edge computing and data centre infrastructure.
By combining low-latency communications with advanced AI models, the two companies aim to support use cases such as swarms of unmanned drones, automated surveillance of critical infrastructure and resilient battlefield communications. Both Nokia and NestAI frame the partnership not only as a business opportunity, but as a contribution to European tech sovereignty, reducing dependence on non-European suppliers for sensitive military technologies.
Finnish Defence Forces look to domestic AI for future warfare
The partnership with Nokia comes as the Finnish Defence Forces (FDF) are accelerating their own AI strategy. Beginning in 2025, the FDF is working with NestAI to develop data-centric command and control, preparing an AI Centre of Excellence that is expected to be operational by 2026. The aim is to integrate AI into planning, situational awareness and decision-making, while ensuring that data flows remain under Finnish and European control.
Finland’s accession to NATO and its long land border with Russia have increased the political and strategic attention on how the country equips its armed forces. Investing in domestic defence technology is seen as a way to combine military readiness with industrial policy, creating high-skilled jobs while reinforcing the security of supply. The Nokia–NestAI collaboration fits into this approach by tying a global network company to a fast-growing AI specialist rooted in Finland’s research ecosystem.
For the FDF, an emerging domestic ecosystem around AI-enabled command and control and unmanned systems could make it easier to adapt tools to Nordic terrain and operational needs. At the same time, it raises expectations about exports to other European armed forces and joint projects under NATO frameworks, where interoperability and secure communications are key themes.
European tech sovereignty, Nvidia money and ethical questions
Nokia’s AI defence push illustrates a broader tension in Europe’s AI and defence policy. On the one hand, European institutions are trying to foster an indigenous AI ecosystem, with large public–private investment programmes and initiatives aimed at strengthening local startups and infrastructure providers. On the other hand, some of the most important capital and hardware for AI still come from US companies like Nvidia.
The Nvidia investment gives Nokia access to cutting-edge graphics processing units and accelerators needed for AI workloads in data centres and future AI-native networks, including those that may be used for defence applications. It also underscores how deeply intertwined European and US technology ecosystems have become, especially in areas such as 6G, cloud computing and AI training infrastructure.
At the same time, the rapid integration of AI into defence systems raises ethical, legal and strategic questions. European debates on the regulation of AI, including exemptions for military use, highlight concerns about autonomous weapons, accountability and the risk of escalation when decision-making is delegated to algorithms. While companies like Nokia and NestAI emphasise human oversight and compliance with international law, the pace of technological change is fast, and oversight mechanisms are still catching up.
For now, Nokia presents its new unit and the NestAI partnership as tools to strengthen resilient communications, situational awareness and protection of critical infrastructure rather than fully autonomous weapon systems. However, the same technologies that enable safer operations and better information can also be integrated into offensive capabilities, which is why transparency and clear governance frameworks will remain crucial.
