Nokia’s stock prices jumped by as much as 20% on Tuesday following the announcement that Nvidia would invest $1 billion in the Finnish telecom firm and team up on advancing next-generation 6G and AI technologies.
According to the agreement, Nvidia will buy more than 166 million new Nokia shares at $6.01 each, which amounts to a 2.9% equity stake in the company. Nokia indicated that the funds will be directed towards fast-tracking its strategic objectives in AI-enhanced connectivity and data center networking, in addition to general corporate activities.
“The strategic partnership and investment are anticipated to generate considerable value for both entities,” Nokia mentioned in a statement. “We aim to expedite the progression of 5G and 6G RAN software on Nvidia’s platform and broaden our footprint in the AI and cloud marketplace.”
As a part of this deal, Nokia will modify its 5G and 6G software to function on Nvidia’s processors and will work together on AI networking innovations. The firms will also investigate the integration of Nokia’s data center switching and optical networking technologies into Nvidia’s AI framework. Nvidia confirmed on Tuesday that it is evaluating Nokia’s technology for its forthcoming AI systems.
The two organisations are anticipated to unveil specifics of the partnership at Nvidia’s developer conference in Washington DC later this week, where CEO Jensen Huang will present a keynote address to global policymakers and technology leaders.
This investment marks Nvidia’s latest initiative to enhance relationships with key technology and infrastructure associates as it cements its role at the heart of the global AI ecosystem. In recent months, Nvidia has pledged $5 billion to Intel, $100 billion to OpenAI, $500 million to the UK self-driving startup Wayve, and $667 million to British cloud provider Nscale.
This action also reflects Nvidia’s increasing interest in the telecommunications and connectivity frameworks that support AI implementation worldwide. Nokia, once famous for its mobile devices, has transformed into one of the leading suppliers of 5G infrastructure for telecom companies. The firm expressed that the partnership with Nvidia will strengthen its position in the “AI supercycle,” facilitating the incorporation of machine learning features into next-generation network technologies.
The new shares are predicted to be registered in November and will be traded on Nasdaq Helsinki, Euronext Paris, and the New York Stock Exchange.
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