Nvidia plans to make a $1 billion equity investment in Nokia, which is widely seen as a strong endorsement of the Finnish company's transformation from a maker of mobile network equipment to a player in artificial intelligence.
The two parties said in a statement on Tuesday that Nokia will issue approximately 166 million shares to Nvidia at a price of $6.01 per share, and Nvidia will hold approximately 2.9% of Nokia's shares. Under the agreement, Nvidia's chips will be used to accelerate Nokia's 5G and 6G network software development, and Nvidia will also explore the possibility of applying Nokia's data center technology in artificial intelligence infrastructure.
Nokia, best known for selling mobile network equipment, is now making a major push into data centers. This transformation strategy has begun to bear fruit and helped Nokia beat Wall Street expectations last quarter. Earlier this year, Nokia acquired Infinera for US$2.3 billion to further expand its network product line for AI data centers.
Nvidia has continued to make large-scale investments in recent months. The company has said it will invest up to $10 billion in OpenAI and billions of dollars in autonomous driving companies Wayve and Oxa, financial technology company Revolut, and AI company PolyAI. Nvidia also plans to jointly invest US$500 million with Deutsche Telekom to build a new data center.