A NATO-backed startup named Scaleout Systems is developing AI-driven systems for detecting and selecting targets using small drones. These systems are designed to support both surveillance and attack missions. The company was founded in 2018 by researchers from Uppsala University in Sweden. Initially, Scaleout focused on training and deploying machine learning models directly on hardware found in commercial vehicles, such as trucks. However, after Russia's full-scale invasion of Ukraine in 2022, the company shifted its focus toward defense applications, recognizing the growing need for advanced AI in military operations. Andreas Hellander, co-founder and CEO of Scaleout Systems, explained that the company aims to help NATO allies gain a strategic advantage by operationalizing data collected from the edge—such as sensor data—using machine learning. Rather than relying on large, complex AI models from companies like OpenAI or Anthropic, Scaleout is developing more efficient models that can perform tasks like computer vision directly on the hardware of drones or computers used in forward military bases. Hellander emphasized that these AI models must be compatible with a wide range of hardware used in field operations. This includes everything from small embedded devices to more powerful edge computing workstations. The hardware available in forward-deployed locations can vary greatly, making adaptability a key challenge for the company. Scaleout Systems was selected to join NATO’s Defence Innovator Accelerator for the North Atlantic (DIANA) Challenge Program in 2025. As part of this initiative, the company is working on the Federated Aerial Intelligence for Recon project. This effort aims to adapt machine learning models for use with the edge computing hardware found in drones, drone pilot tablets, and field command posts. The project highlights the growing importance of AI in modern military operations and the need for scalable, adaptable technology that can function in diverse and challenging environments.