- Nokia's $1 billion deal with Nvidia is a sorely needed win for the telecom vendor
- But Nvidia appears to have much more to gain from an investment that amounts to pocket money for the tech giant
- It remains to be seen whether AI-RAN will pan out in the telecom market, which is currently skeptical that GPUs are really needed
Nvidia generated a lot of buzz when it announced a $1 billion investment in Nokia yesterday. Now that the worst of the dust has settled, it's worth taking a closer look at the deal and who has the most upside to gain from the tie up.
On one hand, it’s easy to argue the deal is a boon for Nokia. After losing business to Ericsson (AT&T) and Samsung (Verizon) in recent years and weathering a sudden CEO swap earlier this year, it is a much needed a win. Plus, it makes sense for the direction Nokia is heading.
Given Nokia laid out plans to build up its data center business after acquiring Infinera, the Nvidia deal is the stuff dreams are made of. And it certainly seems to be the kind of pairing its new CEO Justin Hotard – whose background is in data centers, compute and AI rather than telecom – would wholeheartedly embrace.
Nokia is following the pack here. J.Gold Associates Founder and Principal Jack Gold told Fierce that Ericsson (via a collaboration with Intel) and Huawei (with its own in-house muscle) are both already going down the AI path. But whether the vendors are skating to where the puck is headed or just pushing an unwanted technology on operators has yet to be determined.
Dell'Oro Group's Stefan Pongratz told Fierce that the company's AI-RAN forecast hasn't changed: it's expecting that around a third of the RAN revenue by 2029 will be for AI-RAN. In other words, it is predicting AI-RAN revenue will top $10 billion before the end of the decade.
"If anything, the announcement is a confidence boost both for the vRAN and AI-RAN movements and bolsters the forecast we have already communicated," Pongratz told Fierce. "My initial take is that this is a positive for the RAN ecosystem. With so much talk in the wireless media about telecom being dead and the base case being that the RAN market is flat and mobile data traffic is slowing, it is difficult to view NVIDIA's entry into RAN as a negative."
However, there seems to be some resistance among operators, who aren’t yet sold on the GPU-centric AI-RAN vision Nvidia, Nokia and others have pitched. It seems the idea of incorporating pricey GPUs into an already sprawling network is a hang-up for the likes of Verizon and Orange. Fierce Network's Monica Alleven has heard this sentiment from analysts, vendors and operators alike. And it's not just about the cost of the chips themselves, but also the accompanying power requirements given energy is a key operating expense for operators, which have long been working to become more power efficient.
Could they eventually be convinced? Maybe or even probably, but telecom is an industry that is notoriously slow to move and it remains to be seen whether Nvidia – which moves at breakneck pace to release a new chip every year – really understands telcos or has the patience to deal with them.
Nvidia's future payday
While it certainly seems like a good thing for Nokia, the collaboration could prove to be an even bigger deal for Nvidia—if its AI-RAN dreams are realized.
At GTC, Nvidia tried hard to push its work with the Finnish vendor as part of a quest to make telecommunications great again (that is, made in the U.S.). But the deal isn’t borne of an altruistic desire to restore America’s telecom dominance with the advent of 6G. Unless if by America you actually mean Nvidia.
Gold told Fierce that when it comes to bringing 6G back to America, the boat has already sailed because there are currently no leading telco infrastructure vendors that are based in the U.S. (and no, Cisco doesn't count here because its market presence is nowhere near that of the big three). That said, it makes sense to buddy up with a player like Nokia since "telco, with 6G investments coming towards the end of the decade, will certainly be a big potential market" for Nvidia's chips.
Indeed, Nvidia CEO Jensen Huang said himself that Nvidia’s new ARC platform (the one it wants to put in Nokia’s radios) has a “great chance of being a multi-billion-dollar business for us, if not larger than that.”
With that in mind – as well as Nvidia’s announcement at GTC that it has line of sight to half a TRILLION dollars in Blackwell-Rubin revenue by the end of 2026 – a $1 billion investment doesn’t sound like a whole lot.
“This $1 billion deal is peanuts to them. It’s a bargain," Futuriom Founder Scott Raynovich told Fierce. “I think Nvidia is looking to diversify its ecosystem and Nokia presents a value-priced opportunity to expand Nvidia’s influence in the telecom market as well as data center networking.”
Gold offered a similar take, calling the $1 billion headline figure "pocket change" but a worthwhile gamble for Nvidia.
"There is benefit to both, but unless Nokia can capture a large share of the upcoming market, Nvidia won’t benefit that much since the current market has been leaning towards Ericsson and Huawei," he explained. Again, Ericsson has already partnered with Intel for custom chips, which unlike Nvidia, already has a substantial share in the telco market.
Raynovich said he wouldn’t be surprised if Nvidia eventually made a play to straight up acquire Nokia. “They would be in a position to crush Ericsson and take over the whole telecom market, if they wanted to,” he said.
10/29/2025 3 pm ET: This story has been updated to include comments from Dell'Oro Group's Stefan Pongratz.