Well, that didn’t take him long. Justin Hotard only joined Nokia as CEO on April 1st this year, but his appointment turns out to be no joke for the Finnish telecom incumbent.
Nokia announced today that Nvidia is investing $1 billion in Nokia, giving it a 2.9% stake in the business.
A billion dollars is a nice big number — but the deal’s impact on market sentiment will place significantly more capital at Nokia’s disposal. Its stock (NYSE: NOK) leapt like a salmon on the news — up 25% at press time, increasing the company’s market capitalization by $8.5 billion.
The history of the telecom industry is replete with failed mergers, acquisitions, investments and partnerships. There was Nokia’s own deal with Microsoft in 2014, the 2015 Cisco/Ericsson disappointment, and all of HPE’s deals, ever, including Autonomy (fatality!).
This is not one of those deals. This is, on paper, a really good deal, especially for Nokia and its carrier customers. It combines Nvidia’s AI chip leadership with the 5G expertise and trusted status of Nokia, one of the world’s Big Five telecom incumbents. That is a potential game-changer, particularly at the AI edge of the network, where the new global AI digital economy will be put into practice.
Of course, Hotard still has much work to do at Nokia, which still tends to act like seven acquisitions under a trench coat rather than one unified company. But this Nvidia deal is an impressive win for him. Kudos and points: allocated.
Check out my exclusive conversation with Justin Hotard.
Steve Saunders is a British-born communications analyst, investor and digital media entrepreneur with a career spanning decades.
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