Nvidia to invest $1 billion for 2.9% stake in Nokia amid push towards artificial intelligence — Here's what we know

Jensen Huang's Nvidia is planning to make an equity investment woth $1 billion in Nokia Oyj, as the AI chipmaker bets on the Finland-based company's turnaround from mobile networking kit into artificial intelligence.

Nvidia will purchase 166 million shares of Nvidia at $6.01 apiece, getting a 2.9 per cent stake in the company, according to a statement by the the companies. In turn, Nvidia will give Nokia access to its chips to enhance the company's for 5G and 6G networks.

Nvidia will also expole ways to utilise the data centre technology of Nokia in its AI infrastructure, the companies said.

Nokia, best known for selling mobile network parts, has been pushing into data centers — a business that’s growing thanks to the growing demand for computing capacity from the artificial intelligence boom. The move has paid off, and helped Nokia beat Wall Street estimates last quarter. The Espoo, Finland-based company earlier this year bought Infinera Corp. for $2.3 billion to expand into networking products for AI data centers.

How did Nokia shares react?

Nokia shares jumped as much as 17% in Helsinki after the statement, the biggest intraday gain since 2013.

The tie up could be a boost for the Nokia brand, which is still best known among consumers for the range of mobile phones it no longer makes. Chief Executive Officer Justin Hotard is leading a turnaround of the Nordic company, emphasizing its position as the only Western alternative to Huawei Technologies Co. for supplying the entire portfolio of communications kit, from 5G radios to fiber optic cables.

Nvidia's spending spree

Nvidia has been on a spending spree in recent months. The company said it will invest as much as $100 billion into OpenAI and will fund autonomous vehicle companies Wayve and Oxa, fintech Revolut and AI companies like PolyAI. The company also will invest in a German data center alongside Deutsche Telekom AG, Bloomberg News reported earlier.

European policymakers and tech executives alike have been talking for months about the need for the bloc to develop its own AI ecosystem and catch up to rivals in the US and China. Nvidia CEO Jensen Huang and others have criticized Europe for being too slow to develop its own infrastructure and support companies that want to use AI while keeping their data within the region.