Nvidia takes 2.9% stake in Nokia with USD1b investment to develop AI-powered networking
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The news: Nvidia will make a USD1 billion ($1.5 billion) equity investment in Nokia and take a 2.9% stake, as part of a new strategic partnership focused on developing AI-enabled networking technologies.
The context: The deal comes as Nokia pivots from mobile networking to data centres to support AI infrastructure growth. And it also follows the completion of its Infinera Corp acquisition for USD2.3 billion.
The deal also builds on Nvidia’s broader AI investments. The AI giant has committed up to USD100 billion to OpenAI and made major investments in European firms, including autonomous vehicle startups Wayve and Oxa, fintech firm Revolut, AI company PolyAI and into a EUR500 million data centre with Deutsche Telekom.
Nokia said the investment is part of a strategic partnership to develop software for future mobile networks using Nvidia’s technology and to collaborate on networking systems that support artificial intelligence, such as AI-powered radio access networks, or AI-RAN.
The proceeds will be used to accelerate Nokia’s strategic priorities supporting “trusted connectivity for the AI supercycle” and for general corporate purposes, the Finnish company said in a statement.
As part of the partnership, Nokia will adapt its 5G and 6G RAN software to run on Nvidia’s architecture, and the companies will collaborate on AI networking and explore integrating Nokia’s data centre switching and optical technologies into Nvidia’s future infrastructure.
The numbers: Nvidia will pay USD6.01 (EUR5.16) per share through a directed share issuance of about 166.4 million new shares, totalling USD1 billion (EUR0.86 billion), representing 2.9% of Nokia post-issuance.
The shares will be issued as American Depositary Shares and are expected to begin trading on Nasdaq Helsinki, Euronext Paris and the NYSE after registration.
Nokia said the subscription price was negotiated with Nvidia and reviewed with advice from JP Morgan, Skadden, Arps, Slate, Meagher & Flom, and Krogerus, who backed the board’s decision to bypass shareholder pre-emptive rights.
