Nokia Stock Soars. Nvidia to Invest $1 Billion and Take 2.9% Stake.

Nvidia’s stake will boost the Finnish company’s ability to build connectivity solutions for AI. (Nokia)

Key Points

• Nvidia will invest $1 billion in Nokia, acquiring a 2.9% ownership stake through the purchase of over 166 million shares at $6.01 each.
• Nokia plans to adapt its radio access network software for Nvidia’s chips and collaborate on artificial-intelligence networking solutions.
• Nokia’s U.S.-listed shares soar following the announcement.

Nvidia will invest $1 billion in Nokia in a deal to boost the Finnish company’s ability to build connectivity technology for artificial intelligence.

Nokia will issue Nvidia more than 166 million shares at $6.01 apiece, giving Nvidia a 2.9% ownership stake in the company. Nokia intends to develop its radio access network software to run on Nvidia’s chips. The companies also agreed to work together on AI networking solutions.

U.S.-listed Nokia shares soared 22% to $7.73 a share Tuesday. Nvidia stock was up 1.3%. Cloud-networking providers and Nokia rivals Arista Networks and Ciena fell 0.1% and gained 0.1%, respectively.

Nokia has made its AI ambitions clear this year, poaching Justin Hotard from Intel’s Data Center and AI Group in April to become the company’s CEO. The company also announced a partnership with server maker Super Micro Computer last month to create an integrated data-center solution for AI computing.

Write to Nate Wolf at nate.wolf@barrons.com