Estonia is the latest stage of NestAI’s Nordic and Baltic expansion after the company entered Sweden in August and Latvia in September. NestAI has maintained a small team in the country for more than a year and is now formalising its presence.
The investment builds on a June 2026 letter of intent signed with Finland’s Ministry of Defence and the Estonian Defence Forces. The agreement established a framework for cross-border AI research and provides a route for additional allied countries to participate.
The cooperation covers adaptive and learning AI, command-and-control support and autonomous and unmanned systems. It prioritises open and modular architectures that can operate across allied equipment without dependence on a single supplier.
NestAI’s main product is NestOS, an adaptive operating system for battlefield operations. It is designed to keep learning from operational data after deployment, including when communications are degraded and conditions change faster than conventional software release cycles.
“Estonia’s objective is clear: new technologies must translate into real military capability faster,” said Defence Minister Martin Herem. “Bringing this expertise together with Estonia’s operational experience and digital strengths helps us develop solutions that strengthen our defence and can be put to practical use by our forces.”
The Tallinn operation is also intended to retain Estonian engineers and data scientists by giving them access to military AI projects at home. NestAI plans to work directly with the country’s armed forces, defence industry and research institutions.
“The soon to be established R&D centre is a way of keeping the right talent in Estonia,” said Dr Ivo Peets, Commander of the Force Transformation Command. “NestAI’s presence gives Estonian talent the opportunity to develop sovereign AI for battlefield operations right here at home, working directly alongside our forces.”
Estonia published a national defence AI strategy in March 2025 and is allocating 5.4 per cent of gross domestic product to defence this year. Its defence technology sector has increased turnover roughly sevenfold in four years, according to NestAI.
The company’s expansion was announced by founder and executive chairman Peter Sarlin at the Estonian Defence Industry Symposium in Tallinn on 22 September. Sarlin linked the investment to the need for AI systems that can adjust after deployment rather than rely on periodic software updates.
“Strengthening Europe’s borders is urgent, and it is not work that can be done at a distance,” Sarlin said. “AI that cannot keep learning after it is deployed will not hold, and building that capability means building it with the forces and companies who face those conditions.”
NestAI aims to make adaptive AI part of military operations across the Nordic and Baltic region. Its Tallinn investment combines local recruitment with an allied framework for battlefield software, autonomous systems and command-and-control technology.
