Nokia's stock increased by 17%! Partnership with NVIDIA

Nokia (HE:NOKIA) stock rose by 17% following the announcement of a $1 billion equity investment as part of a new strategic partnership with NVIDIA (NASDAQ:NVDA). Due to investor interest, trading of Nokia's American Depositary Shares was suspended in New York ahead of the announcement.

This investment is expected to enable NVIDIA to purchase 166,389,351 new shares of Nokia at a price of $6.01 per share. Thus, the artificial intelligence chip manufacturer will become a 2.90% shareholder of Nokia. The two companies will collaborate to shape the Artificial Intelligence Radio Access Network (AI-RAN) market and support the evolution of data center networks.

Nokia plans to use the funds raised to accelerate its strategic initiatives aimed at providing reliable connectivity in line with the "Artificial Intelligence supercycle" and other corporate goals. In particular, Nokia aims to expedite the development of 5G and 6G Radio Access Network software and expand its presence in the artificial intelligence and cloud market with data center network solutions.

As part of the partnership, both companies will collaborate on artificial intelligence network solutions and explore opportunities to integrate Nokia's data center switching and optical technologies into NVIDIA's future artificial intelligence infrastructure architecture.

This share issuance will represent approximately 2.98% of Nokia's total shares and is expected to be completed in November following the completion of the cash registration process. The new shares are expected to trade as American Depositary Shares on Nasdaq Helsinki, Euronext Paris, and the New York Stock Exchange.

Nokia Board emphasized that the deviation from shareholders' preemptive rights is justified by "serious financial reasons" and highlighted that the strategic partnership and share issuance will benefit both Nokia and its shareholders.