Nvidia to invest $1 billion for 2.9% stake in Nokia amid push towards artificial intelligence — Here’s what we know
(Bloomberg) — Nvidia Corp. plans to make $1 billion equity investment in Nokia Oyj; The kingmaker of the artificial intelligence industry believes that the Finnish company will switch from mobile network kit to artificial intelligence.
Nokia will issue about 166 million shares to Nvidia at $6.01 each, giving Nvidia a 2.9% stake, the companies said Tuesday. It was stated that 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 artificial intelligence infrastructure.
Nokia, known for selling mobile networking parts, is moving into data centers, a growing business thanks to the growing demand for computing capacity driven by the artificial intelligence boom. The move paid off, helping Nokia beat Wall Street estimates last quarter. The Espoo, Finland-based company acquired Infinera Corp. for $2.3 billion earlier this year to expand into networking products for AI data centers.
Following the announcement, Nokia shares rose as much as 17% in Helsinki, recording their biggest intraday gain since 2013.
This merger could be a boost for the Nokia brand, which is still known among consumers for its discontinued range of mobile phones. Chief Executive Justin Hotard is leading the transformation of the Scandinavian company, highlighting its position as the only Western alternative to Huawei Technologies Co. in 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 would invest up to $100 billion in OpenAI and fund autonomous vehicle companies Wayve and Oxa, fintech Revolut, and AI companies such as PolyAI. The company will also invest in a German data center alongside Deutsche Telekom AG, Bloomberg News previously reported.
European policymakers and technology executives have been talking for months about the need for the bloc to develop its own artificial intelligence ecosystem and catch up with 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 artificial intelligence while keeping their data in the region.
