Finnish telecommunications giant Nokia has announced a major capital injection and a new strategic partnership with American chip designer NVIDIA. NVIDIA will make a $1 billion (€860 million) equity investment in Nokia, acquiring a stake of approximately 2.90%.
The investment is accompanied by a collaboration focused on shaping and leading the AI-RAN (Artificial Intelligence in Radio Access Networks) market and the evolution of data center networks.
Nokia’s Board of Directors has resolved to issue 166,389,351 new shares to NVIDIA at a subscription price of USD 6.01 (EUR 5.16) per share.
The strategic partnership and investment are expected to create significant value for both companies. Nokia will use the proceeds from the issuance to accelerate its strategic plans to advance trusted connectivity for the AI supercycle and other general corporate purposes.
Nokia intends to accelerate development of Nokia’s 5G & 6G RAN software to run on NVIDIA’s architecture. Nokia will also invest in expanding its presence in the AI & Cloud market, particularly with network solutions tailored to data centers.
Nokia and NVIDIA have also agreed to collaborate on AI networking solutions and explore opportunities to incorporate Nokia’s data center switching and optical technologies in NVIDIA’s future AI infrastructure architecture.
The subscription price of $6.01 per share was determined as part of the negotiations between Nokia and NVIDIA. Nokia has taken independent legal and financial advice to assist in its evaluation of the fairness to Nokia of the terms of the share issuance, taking into account the strategic partnership.
The company believes that the partnership, including the share offering, is beneficial to Nokia and its shareholders, and therefore there is a compelling financial reason to deviate from the pre-emptive rights of existing shareholders.
The company believes that the strategic partnership, including the share offering, is beneficial to Nokia and its shareholders, and therefore there is a a weighty financial reason for deviating from the pre-emptive rights of the shareholders of Nokia in the share issuance.
Nokia expects that the new shares will be registered with the Finnish Trade Register in November. The total number of Nokia shares following the share issuance and registration of the new shares is expected to be 5, 742, 239, 696. The new shares represent approximately 2.98% of the total number of Nokia shares prior to the share issuance and approximately 2.90% of the total number of Nokia shares following the share issuance.
