Top chipmaker Nvidia (NASDAQ:NVDA) is investing $1B in Nokia (NYSE:NOK)—the former Finnish cellphone giant, which has transformed into an important telecom infrastructure company—to integrate each other’s technologies, which will help them become frontrunners in AI-powered networking.
Shares of Nokia were halted before the news became public; NOK resumed trading and is up nearly 20% before midday on Tuesday.
The investment will be used to accelerate development of Nokia’s 5G & 6G RAN software to run on Nvidia’s architecture and to ramp up Nokia’s presence in the AI & cloud market, according to the official statement.
The companies have also agreed to collaborate on AI networking solutions and explore opportunities to incorporate Nokia’s data center switching and optical technologies in Nvidia’s future AI infrastructure architecture.
Nokia’s board will issue 166,389,351 new shares at $6.01 per share to Nvidia for the billion-dollar investment, making the chipmaker a 2.9% stakeowner in the company.
On Monday, Bloomberg reported that Nvidia and Deutsche Telekom (OTCQX:DTEGY) (OTCQX:DTEGF) are preparing to announce a €1B data center in Germany next month in a broader push for developing more infrastructure across Europe to power AI systems.