Nvidia has confirmed it will invest $1 billion in Nokia as part of a strategic agreement to push AI networking.

The deal will see the GPU giant take a 2.9 percent stake in Finnish network vendor Nokia, snapping up 166 million shares.

As part of the agreement, the two companies will work together on incorporating AI into telecom networks and data center infrastructure.

Nvidia's $1bn investment is based on a subscription price of $6.01 per share. Following the announcement, shares in Nokia rose by as much as 26 percent.

Nokia stated that the tie-up will see the company use Nvidia's AI products to upgrade its 5G and 6G networks, adding that US carrier T-Mobile will also work with the duo to test AI-RAN technologies as part of the 6G innovation and development process.

"Trials are expected to begin in 2026, focused on field validation of performance and efficiency gains for customers," noted Nokia.

"Revolutionize telecoms"

"Telecommunications is a critical national infrastructure the digital nervous system of our economy and security," said Nvidia founder and CEO, Jensen Huang. "Built on Nvidia Cuda and AI, AI-RAN will revolutionize telecommunications - a generational platform shift that empowers the United States to regain global leadership in this vital infrastructure technology.

"Together with Nokia, and America’s telecom ecosystem, we’re igniting this revolution, equipping operators to build intelligent, adaptive networks that will define the next generation of global connectivity."

Nvidia, which has been the main beneficiary of the AI boom thanks to the popularity of its GPUs, has been splashing the cash on investments in recent months. In September, the company announced it would invest $100 billion in OpenAI, while it also committed $5bn to rival chip firm Intel.

Nokia's share price is at a five-year high since the appointment of Justin Hotard as the company's CEO in April. Since taking charge, Hotard, a former Intel data center executive, has outlined the importance of pushing AI investments and put a heavy focus on data center services.

"The next leap in telecom isn’t just from 5G to 6G - it’s a fundamental redesign of the network to deliver AI-powered connectivity, capable of processing intelligence from the data center all the way to the Edge," said Hotard. "Our partnership with Nvidia, and their investment in Nokia, will accelerate AI-RAN innovation to put an AI data center into everyone’s pocket."

Nokia added that it will accelerate the availability of its 5G and 6G RAN software on the Nvidia Cuda platform and expand its RAN portfolio by embedding Nvidia ARC-Pro at the heart of the new AI-RAN solution.

Nvidia ARC-Pro (Aerial RAN Computer Pro) is a 6G-ready accelerated computing platform that combines connectivity, computing, and sensing capabilities, which Nvidia states is able to help telcos transition from 5G-Advanced to 6G through software upgrades.

Beyond this, the vendor said that it aims to "expand and evolve its AirScale baseband into the 5G-Advanced and 6G era with new AI-RAN capabilities."

Dell Technologies is also supporting Nokia's AI-RAN push through the use of its PowerEdge servers, which provide no-touch software upgrades and aim to deliver a smooth transition from 5G-Advanced and 6G.

“The telecommunications industry owns the most valuable real estate for AI — the Edge, where data is created,” said Michael Dell, Dell CEO.

“This AI-RAN collaboration with Nokia and Nvidia makes that potential real. We’ve built some of the world’s largest AI clusters with 100,000+ GPUs. Now we’re applying that expertise to distribute intelligence across millions of Edge nodes. The operators who modernize their infrastructure today won’t just carry AI traffic - they’ll be the distributed AI grid factories that process it at the source, where latency matters and data sovereignty is critical.”