Nokia Oyj has announced the creation of the first commercial artificial intelligence-powered radio access network platform, developed jointly with Nvidia Corp. This innovation is designed to dramatically boost the volume of data that network operators can send through their current infrastructure.
This development follows the companies' strategic partnership announcement by less than ten months, an agreement that also involved Nvidia acquiring a stake in the Finnish telecommunications equipment manufacturer.
According to a statement released on Wednesday, the new equipment will enable telecom operators to double the data transmitted over identical radio frequencies by 2028. When the hardware becomes available to operators next year, gains in spectrum efficiency are projected to hit 50%, a significant increase from the 20% improvement already realized.
The technology, offered through three new hardware solutions and a complementary software component, aims to further "extend AI into the physical world." It facilitates future upgrades to the yet-to-be-defined 6G standard via software updates and is compliant with the Open RAN standard, ensuring interoperability with equipment from other vendors.
Nokia's Chief Executive Officer, Justin Hotard, stated that the increased efficiency of costly spectrum will lead to improved returns and quicker upgrade cycles for operators. Beyond selling hardware with pre-installed software, Nokia intends to adopt a subscription model, providing ongoing software enhancements.
This new platform arrives as European telecom operators continue their transition to fifth-generation networks, a process that has been slower than anticipated. Carriers have faced challenges in recouping investment costs from customers due to intense competition and a lack of clear use cases demanding advanced connectivity.
Nokia and Nvidia assert that their platform will be transformative, fundamentally altering network operations by shifting from hardware-centric designs to software-defined, standard computing architectures. A core objective of the collaboration is to process data nearer to the end-user, reducing latency and integrating more Nvidia chips into mobile networks.
Nvidia's CEO, Jensen Huang, commented that the partnership brings NVIDIA CUDA and AI capabilities into the network baseband, effectively turning the radio access network into a global-scale AI computer. He described this as a generational shift for operators, unlocking greater capacity and efficiency from existing spectrum while laying the groundwork for new AI services and the 6G era.
The partnership with Nvidia, revealed last October, is a key element of Nokia's broader strategic pivot. The company is refocusing its broadband and mobile connectivity services to capitalize more extensively on the expansion of AI infrastructure.
This agreement opens the digital networks sector as a new potential market for Nvidia's chips and includes collaboration in the data center connectivity market, a segment Nokia entered through its $2.3 billion acquisition of Infinera in 2024. Nokia's share price has risen approximately 86% this year after surging nearly 170% earlier.
Competitor Ericsson AB is also modernizing its equipment in preparation for an increase in AI-powered devices, like robots, operating on mobile networks. However, Ericsson's outgoing CEO, Börje Ekholm, stated during his final earnings call that the company has chosen to remain a specialized supplier of mobile network gear to telecom operators rather than entering the data-center market.
Ekholm explained that the company selected a different position in the value chain, aiming to capitalize on its established role when AI becomes more integrated into the physical world.