In a bold push that blends artificial intelligence with next-generation connectivity, Nvidia has struck a $1 billion investment deal with Finnish telecom giant Nokia, acquiring roughly 2.9% of the company.

The move positions both firms at the heart of an emerging global race to integrate AI into data centers and network infrastructure.

The partnership aims to merge Nvidia’s dominance in AI computing with Nokia’s deep roots in telecommunications hardware. Together, the companies plan to develop advanced AI networking systems and integrate Nokia’s communication technologies into Nvidia’s expanding data center ecosystem.

The announcement triggered a market frenzy – Nokia’s stock surged more than 20%, reaching its highest point in nearly a decade.

Rebuilding Global Connectivity Through AI

Nvidia’s CEO Jensen Huang called the collaboration a cornerstone for bringing high-end telecom innovation back to U.S. soil. Speaking in Washington D.C., he praised Nokia’s leadership for helping “build the foundation of America’s AI-powered communication future.”

The long-term vision behind the partnership stretches far beyond data centers. The two companies are working on technologies that could form the basis for 6G wireless systems, where AI will play a central role in automating network functions, improving energy efficiency, and supporting new industries like autonomous logistics and immersive virtual environments.

According to analysts, the deal reflects how next-generation networks and artificial intelligence are becoming inseparable. “This partnership validates Nokia’s relevance in the new AI era,” said Paolo Pescatore of PP Foresight, noting that 6G development will rely heavily on intelligent, adaptive networking.

Betting Big on Data Center Expansion

The collaboration comes as global investment in AI-driven infrastructure accelerates. McKinsey & Co. projects that spending on data centers could exceed $1.7 trillion by 2030, fueled by the rapid adoption of machine learning, robotics, and cloud-based automation.

While Nvidia already dominates the AI chip market – powering systems at Microsoft, OpenAI, and many other tech leaders — the company is now moving deeper into the networking layer where data actually flows. Nokia, meanwhile, stands to gain by integrating its data connectivity technologies directly into Nvidia’s AI systems, effectively positioning itself as the backbone of tomorrow’s intelligent data centers.

Analysts at Danske Bank called the partnership “strategically complementary,” pointing out that Nvidia’s reach in the U.S. market and Nokia’s engineering expertise in high-speed connectivity make for a natural alliance.

Nokia’s Reinvention Under Justin Hotard

Since taking the helm earlier this year, Nokia CEO Justin Hotard has steered the company toward AI and data infrastructure, leveraging his background as head of Intel’s Data Center division. His strategy focuses on diversifying beyond telecom into digital infrastructure – a move that is already yielding results.

Nokia recently beat quarterly earnings forecasts thanks to a surge in AI-related demand and the successful integration of Infinera, a U.S. optical networking firm it acquired earlier this year. The deal with Nvidia further solidifies Hotard’s plan to make Nokia a key player in AI-era connectivity.

Under the agreement, Nokia will issue roughly 166 million new shares to Nvidia at $6.01 each. Beyond the financial terms, the companies plan to co-develop AI-powered radio systems with T-Mobile US, initiating trials in 2026 that will help shape early 6G standards.

A New Phase in the AI-Telecom Convergence

The partnership underscores a broader technological shift – one where data centers, cloud computing, and telecommunications are merging into a unified digital infrastructure. By combining Nvidia’s GPU-driven intelligence with Nokia’s communication networks, the two companies hope to accelerate a new era of AI-native networking that can adapt, learn, and scale autonomously.

For Nvidia, the deal deepens its influence across every layer of AI architecture – from processing power to the physical networks that move data. For Nokia, it marks the company’s most significant strategic reinvention in years, giving it a crucial role in the evolution of both AI infrastructure and 6G connectivity.

If successful, this collaboration could redefine not only how data centers communicate but also how the world’s next generation of networks are built.