Dive Brief:
- Electronics maker Nokia announced on Nov. 21 that it has committed to spending $4 billion to expand its manufacturing and research and development capabilities in the United States.
- The funds will help the Finland-based company to accelerate innovation in artificial intelligence-ready technologies in mobile, fixed access, internet protocol, optical and data center networking, according to the press release.
- The investment is also expected to help strengthen Nokia’s AI-optimized networking products and R&D in advanced networking technologies such as automation, quantum-safe, semiconductor manufacturing, testing, packaging and material sciences.
Dive Insight:
Nokia said it expects to spend around $3.5 billion on R&D in an effort to progress new technologies in connectivity and AI through all aspects of its telecommunications infrastructure, such as mobile, data center and defense solutions.
The remaining $500 million will be invested in domestic manufacturing and R&D across Texas, New Jersey and Pennsylvania.
Nokia also established its first U.S. broadband products factory in Kenosha County, Wisconsin, which began production in April 2024.
The investment is part of Nokia’s strategy to address increasing AI demand, which it announced at its Capital Markets Day on Nov. 19. The plan will focus on accelerating growth in AI and cloud computing, mobile connectivity with AI-built networks and 6G, development with customers and stakeholders, investing money where Nokia can deliver technologies at scale, and “unlocking sustainable returns,” Justin Hotard, president and CEO, said at the investor event last week.
This also includes partnering with major companies in the industry to “accelerate time to value,” Hotard added.
The company has begun implementing part of its strategy. In October, Nokia and Nvidia formed a partnership in which the latter’s AI-powered products will be added to the former’s radio access network portfolio. The deal will launch AI-capable, 5G-advanced and 6G networks on Nvidia’s platforms to support telecommunications for its consumer and business services. Nvidia also plans to invest $1 billion in Nokia.
Additionally, Nokia will reorganize its business, according to another Nov. 19 release. The plan includes running two operating segments to better align with its customers’ needs and expedite innovation to address the increasing demand for AI: network infrastructure and mobile infrastructure. The change takes effect Jan. 1, 2026.
Furthermore, the company will move four segments into a business portfolio as it evaluates the next steps for each in 2026. Nokia also plans to establish its defense segment as an incubation unit, serving as the central product launch and R&D hub for the defense portfolio.
“As the trusted western provider of secure and advanced connectivity, our technology is powering the AI supercycle,” Justin Hotard, Nokia president and CEO, said in a statement. “From fixed to mobile infrastructure we are developing technology that accelerates value for our customers.”
The investment adds to the $2.3 billion Nokia spent to acquire chipmaker Infinera, which was completed in February, helping the company build on its commitment in U.S.-based manufacturing, advanced testing and packaging capabilities, per the June 2024 press release.
The Infinera acquisition came with the chipmaker’s previously announced $456 million investment for two manufacturing facilities in the U.S.; a semiconductor fab in San Jose, California, and an advanced test and packaging facility in Bethlehem, Pennsylvania.
Infinera received up to $93 million through the CHIPS and Science Act in 2024, which was finalized in January.
