Nvidia invests $1 billion in Nokia for AI-driven 6G era

Nvidia has solidified its dominant position in the artificial intelligence sector by announcing a $1 billion equity investment in Nokia.

The news sent Nokia’s shares soaring by as much as 26% higher in trading on Tuesday.

The AI chipmaker is taking a roughly 2.9% stake in the Finnish networking giant, which is best known for its early cell phones, but now operates primarily as a supplier of 5G cellular equipment.

Nokia will issue over 166 million new shares to Nvidia at $6.01 apiece, with the proceeds earmarked to fund its plans for AI development and other general corporate purposes.

This significant investment is a clear bet on Nokia’s pivot toward the AI-driven data centre market. The companies have struck a strategic partnership to pool their expertise, with a primary focus on developing next-generation 6G cellular technology.

As part of the deal, Nokia will adapt its 5G and 6G software to run on Nvidia’s powerful chips, and the two will collaborate closely on networking technology tailored for AI applications. Furthermore, Nvidia will explore incorporating Nokia’s data centre switching and optical technologies into its future AI infrastructure.

The partnership comes as Nvidia CEO Jensen Huang is set to deliver a keynote at the company’s developer conference in Washington D.C., where the details of this collaboration are expected to be highlighted.

This latest move is part of an aggressive expansion strategy by Nvidia, which is centrally positioned in the AI boom. In recent months, the company has taken several high-profile equity stakes in strategic partners, including a $5 billion investment in Intel, a $100 billion commitment to OpenAI, and other significant investments in firms such as self-driving car startup Wayve and UK cloud provider Nscale.

The collaboration with Nokia signals a strong push by the chipmaker into the telecommunications space, aiming to create AI-native networks that can handle the explosive growth in AI-driven traffic and seamlessly transition from 5G to the 6G era.