Nielsen's introduction to Formula One came as a truck driver for a Formula One catering company. In 1986, he joined Lotus' test team, before running their Spares department. In 1991, he moved to Tyrrell in the same role before being appointed assistant team manager in 1994. In the next five years he moved to Benetton, back to Tyrrell, to Honda, then Arrows, before moving back to Benetton, where he spent almost a decade as Sporting Director, including the team's transitions to Renault F1 and Lotus Renault GP.
After spending 2012 as Sporting Director at Caterham, Nielsen joined Scuderia Toro Rosso at the start of the 2013 season. On 15 December 2014, Williams announced that Nielsen had joined the team as Sporting Director.