Scaleout Systems, founded by researchers from Uppsala University in Sweden in 2018, has developed small AI models that enable drones to autonomously identify and attack battlefield targets. Originally focused on commercial vehicle applications, the company pivoted to defense after Russia's full-scale invasion of Ukraine in 2022.

"With the war in Ukraine and a shifting world, we realized that this technology can be very important to operationalize edge data and sensor data for machine learning to make sure that NATO allies have found that strategic advantage," said Andreas Hellander, cofounder and CEO of Scaleout Systems.

Instead of using large frontier AI models, Scaleout employs leaner machine learning models suitable for edge hardware ranging from small embedded devices to powerful edge workstations. The company was selected for NATO's Defence Innovator Accelerator for the North Atlantic (DIANA) Challenge Program in 2025, working on the Federated Aerial Intelligence for Recon project.

These AI models help drone operators with target identification and can intermittently share selective updates with headquarters computing nodes for retraining. Scaleout is participating in the Affordable Loitering Modular Ammunition (ALMA) project headed by BAE Systems Bofors, demonstrating AI-enabled target recognition capabilities in public demonstrations in Sweden.