Nvidia To Invest $1 Billion In Nokia In AI Networking Push

Nvidia Corp. plans to make a $1 billion equity investment in Nokia Oyj, as the AI sector's kingmaker bets on the Finnish company's pivot from mobile networking kit into artificial intelligence.

Nokia will issue about 166 million shares to Nvidia at $6.01 apiece, giving Nvidia a 2.9% stake, the companies said in a statement on Tuesday. Nvidia's chips will be used to accelerate Nokia's software for 5G and 6G networks and Nvidia will explore ways to use Nokia's data center technology in its AI infrastructure, they said.

Nokia, best known for selling mobile network parts, has been pushing into data centers — a business that's growing thanks to the growing demand for computing capacity from the artificial intelligence boom. The move has paid off, and helped Nokia beat Wall Street estimates last quarter. The Espoo, Finland-based company earlier this year bought Infinera Corp. for $2.3 billion to expand into networking products for AI data centers.

Nokia shares jumped as much as 17% in Helsinki after the statement, the biggest intraday gain since 2013.

The tie up could be a boost for the Nokia brand, which is still best known among consumers for the range of mobile phones it no longer makes. Chief Executive Officer Justin Hotard is leading a turnaround of the Nordic company, emphasizing its position as the only Western alternative to Huawei Technologies Co. for supplying the entire portfolio of communications kit, from 5G radios to fiber optic cables.

Nvidia has been on a spending spree in recent months. The company said it will invest as much as $100 billion into OpenAI and will fund autonomous vehicle companies Wayve and Oxa, fintech Revolut and AI companies like PolyAI. The company also will invest in a German data center alongside Deutsche Telekom AG, Bloomberg News reported earlier.

European policymakers and tech executives alike have been talking for months about the need for the bloc to develop its own AI ecosystem and catch up to rivals in the US and China. Nvidia CEO Jensen Huang and others have criticized Europe for being too slow to develop its own infrastructure and support companies that want to use AI while keeping their data within the region.