Nvidia will buy a 2.9% stake in Nokia for $1 billion as part of a new partnership focused on AI and data centers. The announcement on Tuesday pushed Nokia’s shares to their highest level in almost 10 years. Nokia said it will work with Nvidia to develop AI-based networking solutions and look for ways to include its data center communication products in Nvidia’s future AI infrastructure.
Nokia to issue around 166 million shares to Nvidia
Nokia will issue around 166 million new shares to Nvidia priced at $6.01 each, giving the US chipmaker a 2.9% ownership in the company, both firms said in a joint statement on Tuesday.
Under the partnership, Nvidia’s chips will help speed up Nokia’s software for 5G and upcoming 6G networks. In return, Nvidia will look into using Nokia’s data center technology in its own AI systems.
From 5G to 6G: Nvidia-Nokia deal marks big step for US tech comeback
Nvidia, which dominates the market for data center chips, has already joined hands with major players like OpenAI and Microsoft.
Nvidia CEO Jensen Huang said the partnership with Nokia would help the US lead the next big shift in 6G technology, a Reuters report said. Speaking in Washington, he thanked Nokia’s CEO Justin Hotard for helping bring advanced telecom technology back to America.
Hotard told Reuters that the main highlight of this deal is that it combines American innovation with Nvidia’s high-speed computing systems, which are now being specially designed for mobile use. He added that the new equipment is expected to start generating revenue from 2027, first through 5G applications and later with 6G.
Analyst Paolo Pescatore from PP Foresight said the agreement is a clear sign of confidence in Nokia’s strength and added that future networks like 6G will be key to unlocking new AI-driven experiences, reported Reuters.
Nokia stages a comeback with AI data center push, shares soar 21%
Nokia, long known for making mobile network equipment, has been shifting its focus toward data centers, a sector booming because of the rising need for computing power driven by artificial intelligence. This move has worked well for the company and helped it exceed Wall Street expectations last quarter. Earlier this year, the Finland-based firm bought US company Infinera Corp. for $2.3 billion to strengthen its range of networking products for AI data centers, a Bloomberg report said.
The report added that some experts have started comparing Nvidia’s recent partnerships with major customers to the circular deals seen before the dot-com crash of the 1990s, when startups boosted their growth numbers by selling to one another.
Once a household name for mobile phones in the 1990s, Nokia faded from public attention after losing its lead in the handset market and turning to network technology. Under CEO Justin Hotard, the company is now working on a revival, positioning itself as the only major Western rival to Huawei that can offer a full range of communication products, from 5G equipment to fiber cables.
