What's the advantage of making an inner class as static with Java?

If the nested class does not access any of the variables of the enclosing class, it can be made static. The advantage of this is that you do not need an enclosing instance of the outer class to use the nested class.

An inner class, by default, has an implicit reference to an object of the outer class. If you instantiate an object of this from the code of the outer class, this is all done for you. If you do otherwise you need to provide the object yourself.

A static inner class does not have this.

That means it can be instantiated outside the scope of an outer class object. It also means that if you 'export' an instance of the inner class, it will not prevent the current object to be collected.

As a basic rule, if the inner class has no reason to access the outer one, you should make it static by default.

A static inner class is a semantically simpler thing. It's just like a top-level class except you have more options for visibility (e.g. you can make it private).

An important reason to avoid non-static inner classes is that they are more complex. There is the hidden reference to the outer class (maybe even more than one). And a simple name in a method of the inner class may now be one of three things: a local, a field, or a field of an outer class.

An artifact of that complexity is that the hidden reference to the outer class can lead to memory leaks. Say the inner class is a listener and could be a static inner class. As long as the listener is registered, it holds a reference to the instance of the outer class, which may in turn hold on to large amounts of memory. Making the listener static may allow the outer instance to be garbage collected.