Nvidia Acquires 2.9% Stake in Nokia for $1 Billion to Advance AI-Powered 5G and 6G Technologies

Nokia announced it will issue over 166 million new shares as part of a major investment deal.

Finland:

Nvidia, the US semiconductor powerhouse, has agreed to purchase a 2.9 percent stake in Finnish telecommunications equipment manufacturer Nokia for $1 billion, according to Nokia's Tuesday announcement. This news triggered a remarkable surge in Nokia's share price, climbing nearly 20 percent.

This substantial investment accompanies a strategic collaboration between the two technology companies aimed at developing Nokia's next-generation 5G and 6G mobile network technologies powered by Nvidia's advanced chips.

"Nokia and Nvidia have established a partnership to develop AI networking solutions and investigate opportunities to integrate Nokia's data centre switching and optical technologies into Nvidia's future AI infrastructure architecture," Nokia stated in their official release.

The agreement involves Nokia issuing more than 166 million new shares, with Nvidia paying $6.01 per share for the stake.

Through this partnership, Nokia "plans to strengthen its position in the AI and cloud market with networking solutions optimized for data centres."

Following the announcement, Nokia's shares jumped more than 19 percent in value, trading at 7.53 euros.

Despite being relatively unfamiliar to mainstream consumers just three years ago, Nvidia has rapidly ascended to become the world's highest-revenue company. This growth has been fueled primarily by its graphics processing units (GPUs), which serve as the essential processors powering ChatGPT and similar AI technologies.