Nvidia will invest $1 billion to acquire a 2.9% stake in Nokia, as part of a strategic partnership in artificial intelligence (AI) and data centers.
Nokia said the partnership includes developing AI-based network solutions and exploring opportunities to integrate its data center communications products into Nvidia's future AI infrastructure plans.
Nokia shares rose 20.86% after the deal was announced, reaching their highest level since late January 2016.
Consulting firm McKinsey estimates that capital spending on data center infrastructure will exceed $1.7 trillion by 2030, driven by the rapid growth of AI technology.
Nvidia Chief Executive Officer (CEO) Jensen Huang said the deal would help make the United States (US) the center of the next revolution in 6G technology.
Meanwhile, Nokia CEO Justin Hotard told Reuters that Nvidia's US technology, which is now optimized for mobile devices, is a key foundation for the new capabilities.
He also expects the new equipment to start contributing to revenue in 2027, when it enters commercial use starting with 5G and followed by 6G.
Since joining Nokia in April, Hotard, formerly head of the data center and AI group at Intel, has focused on growing the company's data center business.
The two companies will also work with T-Mobile US to develop AI radio technology for 6G and begin testing it next year, Nokia said.
