HELSINKI — Nokia announced Tuesday that chipmaker Nvidia is acquiring a $1 billion stake in the Finnish networking company, a move that sent Nokia’s shares soaring and marks the latest in a series of strategic partnerships for the artificial intelligence giant.
Under the deal, Nokia will issue more than 166 million new shares to Nvidia. The company said it will use the proceeds to fund its artificial intelligence initiatives and for other general corporate purposes.
The financial investment is coupled with a broad strategic partnership. The two companies plan to collaborate on developing next-generation 6G cellular technology. Nokia said it will adapt its 5G and 6G software to run on Nvidia’s hardware, and the companies will work together on networking technology tailored for AI data centers.
Nokia also stated that Nvidia would consider incorporating Nokia’s technology into its own future AI infrastructure plans.
The announcement fueled a dramatic surge in Nokia’s stock, which closed up 22% on the Helsinki exchange.
Once known globally for its cellphones, Nokia has transformed in recent years into a major supplier of 5G cellular equipment to telecommunications providers. The partnership with Nvidia aims to position it at the forefront of the coming 6G era.
The news comes as Nvidia CEO Jensen Huang is set to keynote the company’s developer conference in Washington, D.C., an event attended by policymakers and government leaders. Nokia and Nvidia are expected to detail their collaborative plans at the conference.
Nvidia, which has become the world’s most valuable chip company due to its central role in the AI boom, has recently taken several strategic equity stakes. In recent months, the company committed to a $5 billion investment in one-time rival Intel, pledged $100 billion to OpenAI, and invested hundreds of millions in the self-driving car startup Wayve and U.K. cloud provider Nscale.