Abstract2D magnetic materials are garnering significant interest due to their high carrier mobilities, valley pseudospins, tunable bandgaps, and novel spin textures enabling exciting opportunities to explore unique nonlinear optical phenomena and develop next‐generation magneto‐optic and optoelectronic devices. Recently, the FenGeTe2 (FnGT) family of 2D magnets has emerged as a promising candidate for spintronic applications due to their non‐trivial spin textures in low dimensions compared to bulk materials. A coherent interaction is reported between light and suspended FnGT nanoflakes (NFs), resulting in spatial self‐phase modulation (SSPM), a direct manifestation of the optical Kerr effect. The nonlinear refractive index (n2) and third‐order optical susceptibility (χ(3)) are quantitatively estimated from the self‐diffraction patterns of FnGT NFs. The time evolution of the self‐diffraction patterns aligns with the “wind‐chime” model, and the deformation of rings is analyzed in terms of thermal effects. FnGT systems exhibit strong optical non‐linearity (χ(3) ∼ 10−8 esu), an order of magnitude higher than other metal dichalcogenides and 2D magnets. Furthermore, all‐optical logic gates have been realized using cross‐phase modulation. The FnGT family of 2D magnets, with their high curie temperature and robust higher‐order optical nonlinearities, are promising candidates for future magneto‐optical and optoelectronic device applications.