Nokia Restructures Around AI Networks with $1 Billion Nvidia Partnership

Nokia's Strategic AI Transformation

Nokia has announced a comprehensive business restructuring that positions the Finnish telecommunications giant at the forefront of the artificial intelligence revolution. Beginning January 1, 2026, the company will operate through two primary divisions: network infrastructure and mobile infrastructure, marking a strategic pivot toward AI-driven network solutions 1

1

Source: PYMNTS

The network infrastructure division will house Nokia's AI and data center operations, while the mobile infrastructure unit will focus on telecommunications network operations. CEO Justin Hotard emphasized the company's ambitious vision, stating that "Nokia changed the world once by connecting people -- and will again by connecting intelligence" 2

2

Nvidia Partnership Fuels Growth Strategy

The restructuring comes just weeks after Nvidia announced a $1 billion investment in Nokia, specifically targeting the development of 6G technology. This partnership involves integrating Nvidia-powered, commercial-grade artificial intelligence radio access network (AI-RAN) products into Nokia's existing RAN portfolio 2

2

The collaboration enables communication service providers to launch AI-native 5G-Advanced and 6G networks on Nvidia platforms, marking what Nvidia calls "the beginning of the AI-native wireless era." Jensen Huang, Nvidia's founder and CEO, highlighted the strategic importance of this partnership, describing telecommunications as "a critical national infrastructure -- the digital nervous system of our economy and security" 2

2

Financial Targets and Market Positioning

Nokia has set ambitious financial targets as part of its transformation. The company aims for a 6-8% net sales compound annual growth rate between now and 2028 for its networks business. The mobile infrastructure division is expected to deliver even stronger returns, with Nokia targeting gross margins of 48-50% by 2028 1

1

Source: TechRadar

The company also plans significant cost reductions, aiming to slash operating expenses from €350 million to €150 million by 2028. Nokia's recent financial performance shows promise, with the company generating €4.83 billion in its most recent quarter, reflecting 12% year-over-year growth 1

1

Related Stories

Nokia Announces $4 Billion US Investment to Lead AI-Driven Network Infrastructure Revolution

Nokia launches AI Networking Innovation Lab to shape next-generation data center infrastructure

Nvidia Invests $1 Billion in Nokia to Accelerate AI-Powered 6G Networks

Nokia Q2 profit beats expectations as AI data-centre demand doubles cloud sales to €446 million

Market Opportunity and Defense Expansion

The timing of Nokia's restructuring aligns with massive projected growth in AI spending. Citigroup forecasts that artificial intelligence spending will exceed $2.8 trillion by 2029, driven by investments from hyperscalers and rising demand for enterprise AI applications. The banking giant also projects that capital expenditures among data center operators will reach $490 billion by the end of next year 2

2

Beyond its core AI and telecommunications divisions, Nokia is establishing Nokia Defense as a new incubation unit. This division will serve as the central hub for research and development of defense-grade solutions, building on Nokia Federal Solutions in the US and expanding opportunities in Finland and other allied countries 2

2