Nvidia’s $1 Billion Bet Revives Nokia as Europe’s New AI Powerhouse

Picture Credit: The Financial Times

Nokia, once a symbol of mobile phone dominance, is making a striking comeback, this time as a European leader in artificial intelligence. The Finnish tech giant’s shares have surged to their highest levels in years after Nvidia Corp. announced a $1 billion equity investment, marking Nokia’s best monthly performance since 2013 and its steepest weekly rally since early 2024.

The partnership goes beyond finances. Nvidia’s advanced chips will power Nokia’s software for both 5G and next-generation 6G networks, accelerating its transition from traditional telecom infrastructure to AI-driven solutions. This move represents a critical shift for Nokia, which struggled in recent years amid a sluggish 5G rollout and the loss of major U.S. clients such as AT&T and Verizon.

Analysts see the deal as a vote of confidence in Nokia’s renewed strategy. Citigroup’s Andrew Gardiner described Nvidia’s backing as a significant boost for Nokia’s balance sheet and competitiveness in both the radio and AI data center markets. The company’s recent acquisitions have also positioned it to tap into the fast-expanding AI data center ecosystem, putting it in closer alignment with hyperscalers like Microsoft.

Skeptics, however, remain cautious. The global mobile network market is expected to remain flat over the next decade, and telecom operators may initially adopt AI mainly to cut costs rather than fuel large-scale expansion. Yet, the optimism is clear in the numbers as Nokia’s valuation has climbed to around 19 times next year’s earnings, double its 2023 lows, reflecting revived investor confidence.

For the first time in years, Nokia appears poised for sustained growth. With AI data centers emerging as a key revenue driver and gross margins rising, the company is rewriting its legacy and transforming from a fading phone maker into a strategic player at the heart of Europe’s AI revolution.