For decades, the name Nokia evoked rugged mobile phones like the legendary 3310, whose ringtone and Snake game became ingrained in collective memory. However, in the post-smartphone era, the Finnish company reinvented itself as a leading manufacturer of hardware and software for mobile networks, competing with giants such as Ericsson and Huawei.
But in 2025, Nokia is transforming once again. This time, it aims to be recognized not just as a telecom infrastructure provider but also as a key player in the data center ecosystem, driven by the unstoppable rise of artificial intelligence.
📈 “Growth is happening within and between data centers,” explained Vinai Sirkay, Nokia’s Business Development Director, in an interview with DCD. “Whether it’s internal switching, IP connectivity between centers, or optical interconnection, we’re doubling down in that area.”
The surge in applications based on generative AI, advanced modeling, and automatic reasoning is creating an unprecedented demand for processing and connectivity infrastructure. Nokia doesn’t want to be left behind in this new technological landscape.
👨💼 A CEO with Data Center DNA
This strategy isn’t improvised. In 2020, Nokia launched its first hardware portfolio specifically for data centers. But the real turning point came this year with the appointment of Justin Hotard as CEO, replacing Pekka Lundmark.
Hotard brings specialized experience: before a brief stint at Intel—where he led the product line for data centers, including Xeon CPUs and accelerators—he headed the High Performance Computing and AI division at Hewlett Packard Enterprise (HPE). His arrival signals Nokia’s strategic commitment to this new market.
💰 Infinera: A $2.3 Billion Acquisition to Make a Strong Entry into the U.S.
A month before Hotard’s appointment, Nokia completed the acquisition of Infinera for $2.3 billion, a move that not only boosts its technological muscle but also provides a solid customer base among major cloud and web players.
“Infinera gives us the scale to accelerate our roadmaps and innovate faster,” Hotard said in his first earnings call. “It opens doors with hyperscalers, which are key to current AI and cloud investments.”
At OFC 2025 in San Francisco, Nokia didn’t shy away from visibility: banners, shared booths, and speeches emphasized that its union with Infinera is strategic, mainly to strengthen its presence in the competitive U.S. market.
🛠️ From Switches to Automation: The Data Center Offerings
Although Nokia doesn’t build data centers, it provides the equipment that makes them operational: switches, routers, automation platforms, and orchestration software. It has already signed notable deals with companies like Apple, Microsoft Azure, CoreSite, and Kyndryl.
In 2024, Nokia launched an event automation platform for data centers, and its network solutions have been adopted in multiple critical deployments, both in private cloud environments and edge and colocation setups.
🌐 Interconnection, the Achilles’ Heel of AI
According to Subho Mukherjee, Nokia’s global sustainability lead, “AI has been a unique catalyst in a generation for the rise of data centers.” AI not only demands greater computing capacity but also faster, more resilient, and secure networks connecting data centers.
“AI growth requires new connectivity demands, both inside and outside the data center,” Hotard pointed out, highlighting the importance of data center traffic for training, inference, and reasoning model deployment.
Nokia sees this as its competitive edge: while others focus on computing hardware—like NVIDIA with GPUs—Nokia positions itself as a key component in the network infrastructure linking these systems.
“With AI, previous equipment is no longer enough. New solutions with higher performance, security, and reliability are needed,” said Manish Gulyani, Nokia’s Head of Network Infrastructure Marketing.
🧠 Beyond Traditional Telecom Business
Despite this expansion, Nokia will not abandon its core business: radio access networks (RAN), where it remains a global leader. However, the shift toward data centers allows the company to diversify revenue streams and better position itself amid growing competition.
“We have two areas: telecommunications and data centers,” Gulyani summarized. “Now, in cloud networking, we connect all clouds to each other and with end users. And we want to work with anyone in that ecosystem: hyperscalers, colocation providers, private cloud, or edge environments.”
In a market where connectivity has become as crucial as processing power, Nokia aims to become the indispensable partner for the digital infrastructure that will enable the AI of the future.
✅ Frequently Asked Questions (FAQ)
Is Nokia competing with NVIDIA or AMD?
Not directly. While NVIDIA and AMD dominate computing hardware, Nokia focuses on network infrastructure: switching, routing, and optical connectivity.
Why is connectivity between data centers important for AI?
Because distributed AI models need to transfer large volumes of data for training and inference. A fast, reliable network is essential for this.
Will Nokia build data centers?
No. Its goal is to provide technology for data centers, not to develop or operate physical infrastructure.
What is Infinera’s role in this strategy?
It provides advanced optical technology and direct access to hyperscaler clients in the U.S., one of the most challenging markets for Nokia in recent years.
via: datacenterdynamics