Nokia to invest $4B for AI projects in US
What's the story
Finnish telecom giant Nokia has announced a massive $4 billion investment in the United States. The move, according to a Reuters report, is aimed at research, development, and production of artificial intelligence (AI)-driven network connectivity. Out of this total investment, $3.5 billion will be dedicated to R&D activities, while the rest will go toward manufacturing and capital expenditures across many states, including Texas, New Jersey, and Pennsylvania.
Strategic shift
Nokia's new strategy and AI focus
Nokia, which operates several sites in North America and owns Bell Labs in New Jersey, has also announced a new strategy. The plan is focused on streamlining operations with an increased emphasis on AI. This strategic shift comes after Finnish President Alexander Stubb revealed last month that Nokia was among the topics discussed with US President Donald Trump during a White House meeting.
Market response
Nokia's investment follows July profit warning
The latest investment announcement comes after Nokia issued a profit warning in July, citing tariffs and a weakening dollar. This highlights why some non-US companies are moving production to the US as a way of managing trade risks. Notably, the US does not have a major domestic telecom equipment maker, leaving Nokia, Ericsson, and Samsung as the main players in this space.
Industry insights
Nokia's CEO on AI investment and market trends
Nokia's CEO Justin Hotard, who joined the company from Intel earlier this year, has said that Nokia's network focus is on nations that value Western technology. He had previously likened the current wave of AI investment to the internet boom of the 1990s. Hotard also said he believes the industry is "at the front end of an AI supercycle," adding that even if there is a market correction, longer-term prospects look good.
Business performance
Despite AI bubble concerns, Nokia sees growth
Despite concerns over an AI bubble, Hotard sees continued momentum for infrastructure to power these systems. He noted that companies like OpenAI, Microsoft, and Google are heavily investing in expanding their data center capacity, leading to a surge in demand for supporting technologies. "Clearly, the incremental growth and investment are driven by data centers," he said.