Nokia shares up 20% as Nvidia takes $1bn stake
Nokia shares soared as much as 20 per cent on Tuesday after announcing that Nvidia will take a $1bn equity stake in the Finnish telecoms group and partner on developing next-generation 6G and AI.
The deal will see Nvidia purchase more than 166 million new Nokia shares at $6.01 each, giving the American chipmaker a 2.9 per cent stake in the company.
Nokia said the proceeds will be used to “accelerate its strategic plans” in AI-driven connectivity and data centre networking, as well as for general corporate purposes.
“The strategic partnership and investment are expected to create significant value for both companies”, Nokia said in a statement. “We intend to accelerate development of 5G and 6G RAN software on Nvidia’s architecture and expand our presence in the AI and cloud market”.
Strategic AI partnership
As part of the agreement, Nokia will adapt its 5G and 6G software to run on Nvidia’s chips and collaborate on AI networking solutions.
The companies will together also explore incorporating Nokia’s data centre switching and optical networking technologies into Nvidia’s AI infrastructure.
Nvidia confirmed on Tuesday that it is considering Nokia’s technology for its future AI systems.
The two behemothss are expected to showcase details of the partnership at Nvidia’s developer conference in Washington DC later this week, where chief executive Jensen Huang will deliver a keynote to global policymakers and tech leaders.
Nvidia expands empire
The investment marks Nvidia’s latest move to deepen ties with major tech and infrastructure partners as it consolidates its position in the epicentre of the global AI ecosystem.
In recent months, Nvidia has committed $5bn to Intel, $100bn to OpenAI, $500m to UK self-driving startup Wayve, and $667m to British cloud provider Nscale.
And what’s more, this move shows a sign of Nvidia’s growing interest in the telecom and connectivity layer underpinning AI deployment worldwide.
Nokia, once best known for its mobile phones, has transformed into one of the world’s leading providers of 5G infrastructure to telecom operators.
The company said the tie-up with Nvidia will strengthen its position in the “AI supercycle”, helping integrate machine learning capabilities into next-generation network technologies.
The new shares are expected to be registered in November and listed on Nasdaq Helsinki, Euronext Paris, and the New York Stock Exchange.