U.S. chipmaker Nvidia will acquire a 2.9 percent stake in Finnish telecoms giant Nokia for $1 billion, the companies announced on Tuesday, sending Nokia’s shares soaring nearly 20 percent.
The investment expands an existing strategic partnership between the two firms focused on developing Nokia’s 5G and 6G mobile network technologies using Nvidia’s advanced chips.
“Nokia and Nvidia have agreed to collaborate on AI networking solutions and explore opportunities to integrate Nokia’s data centre switching and optical technologies into Nvidia’s future AI infrastructure,” Nokia said in a statement.
Under the deal, Nokia will issue over 166 million new shares at $6.01 per share, to be purchased by Nvidia. The partnership aims to boost Nokia’s presence in the AI and cloud computing market, aligning its data centre networking solutions with Nvidia’s growing AI ecosystem.
Following the announcement, Nokia’s stock jumped 19 percent to €7.53 in afternoon trading.
Nvidia, once known mainly for its gaming graphics cards, has emerged as the world’s most valuable semiconductor company, with demand for its graphics processing units (GPUs) surging amid the global race to develop AI technologies such as ChatGPT and other large-scale machine learning systems.
