TLDR
- Nvidia is purchasing $1 billion in new Nokia shares, causing Nokia’s stock to jump 18%
- Nokia will issue over 166 million new shares and use the funds for AI development and general corporate purposes
- The companies formed a strategic partnership to develop next-generation 6G cellular technology together
- Nokia will adapt its 5G and 6G software to run on Nvidia’s chips and collaborate on AI networking technology
- This investment follows Nvidia’s recent pattern of taking equity stakes in strategic partners, including $5 billion in Intel and $100 billion in OpenAI
Nvidia announced a $1 billion equity investment in Nokia on Tuesday. The deal sent Nokia’s shares up 18% following the announcement.
Nokia will issue over 166 million new shares to Nvidia. The Finnish company plans to use the proceeds for AI development and general corporate operations.
The investment includes a strategic partnership between the two technology companies. They will work together on developing next-generation 6G cellular technology.
Nokia will adapt its 5G and 6G software to run on Nvidia’s chip technology. The companies will also collaborate on networking solutions designed for artificial intelligence applications.
Nvidia stated it would consider incorporating Nokia’s technology into its future AI infrastructure plans. The chipmaker continues to expand its presence in networking and telecommunications.
Partnership Details
Nokia and Nvidia will explore opportunities to integrate Nokia’s data center switching technology into Nvidia’s systems. They will also work on incorporating Nokia’s optical technologies into future AI infrastructure.
The announcement came as Nvidia CEO Jensen Huang prepared to speak at the company’s developer conference in Washington DC. Nokia and Nvidia executives are expected to discuss their collaboration plans at the event.
Nokia, originally known for its early cell phones, now focuses on supplying 5G cellular equipment to telecom providers. The Finnish company has shifted its business model in recent years.
The deal represents the latest in a series of strategic investments by Nvidia. In September, the company committed $5 billion to Intel, its former rival.
Nvidia also announced a $100 billion investment in OpenAI earlier this year. The chipmaker put $500 million into self-driving car startup Wayve.
Recent Investment Activity
The company invested $667 million in UK cloud provider Nscale. These investments reflect Nvidia’s position at the center of the AI industry.
Nvidia has been making equity stakes in companies that align with its technology strategy. The partnerships help Nvidia expand its reach across different technology sectors.
Nokia’s collaboration with Nvidia marks a new direction for the telecommunications equipment maker. The partnership connects Nokia’s networking expertise with Nvidia’s AI chip technology.
The two companies will work on developing networking technology specifically for AI applications. This includes adapting existing cellular technology for AI infrastructure needs.
The investment strengthens Nokia’s position in the 6G technology race. Development of 6G networks is still in early stages globally.
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