Finnish telecommunications giant Nokia announced on Monday that it will replace CEO Pekka Lundmark with Justin Hotard, an American executive currently leading artificial intelligence (AI) initiatives at Intel.
Lundmark, who has been at Nokia’s helm since 2020, is set to step down on March 31, 2025, with Hotard assuming leadership the following day, the company stated.
Strategic Leadership Shift Towards AI
The appointment comes as Nokia seeks to capitalize on the global AI boom, following a significant profit rebound in 2024 after years of declining demand for its 5G equipment from mobile network operators.
“I want to move on from executive roles to work in a different capacity, such as a board professional,” said Lundmark, 61, reflecting on his decision to step down after two decades of leading listed companies.
Hotard, born in 1974, currently serves as Executive Vice President at Intel, overseeing the company’s AI and data center group.
“I am excited to get started and look forward to continuing Nokia’s transformation journey to maximize its potential for growth and value creation,” Hotard said.
He emphasized the importance of AI, stating: “Networks are the backbone that power society and businesses, enabling generational technology shifts like the one we are currently experiencing in AI.”
With over 25 years of leadership experience at major technology firms, including Hewlett Packard, Hotard brings expertise in AI, cloud computing, and data centers—key areas for Nokia’s future growth.
Nokia Eyes U.S. Market Expansion
Nokia Chairwoman Sari Baldauf cited Hotard’s deep knowledge of AI and data centers, along with his understanding of the U.S. market, as key factors behind his appointment.
“The U.S. is an important market for us,” Baldauf said at a press conference, highlighting Nokia’s ambition to strengthen its presence in North America.
Profits Rebound Following Job Cuts
Hotard’s appointment follows Nokia’s impressive financial turnaround.
After announcing job cuts of up to 14,000 positions in 2023 due to declining 5G equipment sales in North America, the company reported an 89% rise in net profit for 2024. Strong sales in India and North America fueled the recovery, particularly in the final quarter.
Analyst Atte Riikola of Finnish market research firm Inderes noted that Hotard’s appointment signals a shift in Nokia’s focus towards network infrastructure, AI, and data centers, areas with stronger growth potential than traditional mobile networks.
“We believe this is a valid direction, as Nokia’s longer-term growth prospects in mobile clearly look more modest than in network infrastructure,” Riikola wrote on Inderes’ website.
Baldauf praised Lundmark’s leadership, acknowledging his role in rebuilding Nokia’s technology leadership in 5G radio networks and strengthening its position in cloud-native core networks.
Following the announcement, Nokia’s stock price rose by 2% to €4.76 ($4.92) on Monday.
When Lundmark took over in 2020, Nokia’s share price was around €4, underscoring the challenges faced by the mobile networks market in achieving sustainable returns on capital, Riikola noted.
