Nokia's AI-Driven Transformation and 6G Leadership: Strategic Reinvention and Long-Term Growth Potential

The telecommunications industry is undergoing a seismic shift, driven by the convergence of artificial intelligence (AI) and next-generation connectivity. At the forefront of this transformation is Nokia, a company once synonymous with the rise and fall of the smartphone era but now repositioning itself as a leader in AI-native networks and 6G innovation. Through strategic partnerships, bold acquisitions, and a renewed focus on R&D, Nokia is not only addressing its historical challenges but also securing a pivotal role in the global race for AI-driven infrastructure and defense technology.

Strategic Partnerships: Accelerating the AI-Native Era

Nokia's collaboration with NVIDIA represents a cornerstone of its AI-driven strategy. In 2025, the two companies announced a $1 billion investment to integrate NVIDIA's AI-RAN technology into Nokia's radio access network (RAN) portfolio, enabling the development of AI-native 5G-Advanced and 6G networks according to a joint announcement. This partnership is critical for addressing the projected $200 billion AI-RAN market by 2030, as AI-powered networks promise to optimize energy efficiency, reduce latency, and enhance scalability.

Complementing this is Nokia's collaboration with Rohde & Schwarz on an AI-powered 6G radio receiver. Validated under real-world conditions, the technology improves uplink coverage by 10% to 25%, significantly reducing deployment costs and accelerating time to market. Meanwhile, Nokia's partnership with T-Mobile U.S. to trial AI-RAN technologies in 2026 underscores its commitment to leading the 6G transition, aligning with T-Mobile's vision for wireless innovation.

Acquisitions and R&D: Building a Foundation for the Future

Nokia's recent $2.3 billion acquisition of Infinera in 2025, coupled with a $4 billion investment in U.S. R&D, highlights its aggressive capital allocation strategy. This investment includes $3.5 billion for next-generation connectivity technologies-such as AI-ready networks, 6G, and data center infrastructure-and $500 million for capital expenditures in Texas, New Jersey, and Pennsylvania according to industry reports. The acquisition of Infinera, a leader in optical networking, strengthens Nokia's capabilities in high-capacity data transmission, a critical component for AI and 6G ecosystems.

These moves reflect a stark contrast to Nokia's earlier struggles. In the 2020–2025 period, the company faced criticism for its lag in 5G deployment and adaptability to smartphone market shifts. However, its recent restructuring into Network Infrastructure and Mobile Infrastructure segments has streamlined operations, enabling faster innovation cycles and tighter alignment with customer needs according to official statements.

Defense Technology: Securing a Strategic Edge

Nokia's expansion into defense applications further underscores its strategic agility. In 2025, the company signed a memorandum of understanding with Kongsberg Defence & Aerospace to deliver 5G connectivity for military operations, focusing on secure, interoperable networks for allied forces. This collaboration includes participation in European Defense Fund initiatives such as 5G COMPAD and the Federated Advanced Cyber Physical Test Range (FACT) program, with long-term exploration of 6G's "network as a sensor" capabilities according to official sources.

Nokia's 5G solutions have already been deployed in high-stakes environments, such as Norway's Joint Viking 2025 military exercise, where its AirScale radio products and 5G Standalone Core enhanced real-time battlefield intelligence sharing. Additionally, the company's Banshee tactical private wireless services have been adopted by the U.S. Marine Corps, demonstrating its ability to meet stringent defense-grade requirements according to deployment reports.

From Past Challenges to Present Agility

Nokia's journey from past missteps to current innovation is instructive. In the 2010s, the company's rigid operational model and slow response to 5G trends led to market share erosion. Today, its reorganization into AI-focused segments and its emphasis on agile R&D reflect a cultural shift. As stated by Nokia's CEO, the U.S. is now the "epicenter of the AI supercycle," and the company's investments are designed to capitalize on this trend.

Long-Term Growth Potential

Nokia's strategic reinvention positions it to benefit from two megatrends: the AI supercycle and the 6G transition. By 2030, AI-native networks are expected to underpin applications ranging from autonomous vehicles to immersive metaverse experiences, all requiring ultra-low latency and high capacity according to industry forecasts. Nokia's partnerships with NVIDIA and Rohde & Schwarz, combined with its defense sector collaborations, create a diversified revenue stream and reduce reliance on any single market.

Moreover, the company's recent €870 million loan from the European Investment Bank (EIB) to advance 5G-Advanced and AI-native 6G research signals strong institutional support. This funding will accelerate R&D in energy-efficient, secure, and interoperable networks-key differentiators in both commercial and defense markets.

Conclusion

Nokia's transformation from a telecom stalwart to an AI-driven innovator is a testament to its strategic reinvention. By leveraging partnerships with industry leaders, making bold acquisitions, and prioritizing R&D in high-growth areas, the company is not only addressing its historical weaknesses but also securing a leadership position in the next-gen connectivity and defense tech sectors. For investors, Nokia's focus on AI-native infrastructure and 6G represents a compelling long-term opportunity, underpinned by a clear vision and execution strategy.