Nokia's Strategic Expansion in Asia-Pacific Digital Infrastructure: A Gateway to 5G and AI-Driven Growth

The Asia-Pacific region is undergoing a digital transformation that is reshaping global infrastructure. As 5G adoption accelerates and AI workloads surge, companies that can deliver scalable, high-performance networking solutions are poised to dominate the next decade of growth. Nokia, a long-time player in telecommunications, is making a bold move in this arena through its partnership with Empyrion Digital, a leading data center provider in the region. This collaboration, centered on the KR1 Gangnam Data Center in Seoul, South Korea, is not just a strategic win for Nokia—it's a signal that the company is positioning itself at the intersection of 5G, AI, and next-generation digital infrastructure.

A Partnership Built for Scale and Sustainability

Nokia's deployment of its 7250 Interconnect Router (IXR) and 7210 Service Access System (SAS) at Empyrion's Gangnam Data Center is a masterclass in addressing the dual challenges of scalability and sustainability. The 7250 IXR, a modular chassis-based switch capable of 800Gbps throughput, serves as the backbone for AI workloads and hyperscale connectivity. Meanwhile, the 7210 SAS ensures seamless integration with Empyrion's IT systems, enabling automation, energy efficiency, and reduced operational complexity.

What makes this partnership particularly compelling is its alignment with the Asia-Pacific's AI-optimized data center market, which is projected to grow at a 22.69% CAGR through 2030, reaching $26.67 billion. By leveraging Nokia's Data Center Fabric solution, Empyrion is future-proofing its infrastructure to handle the exponential data demands of AI training and inferencing. This is critical as AI models grow in complexity and enterprises increasingly rely on real-time analytics for decision-making.

5G as the Catalyst for Network Evolution

Nokia's collaboration with Empyrion is also a key piece of its broader 5G strategy. The company's Kolibri outdoor small cells, deployed alongside the data center partnership, are designed to extend 5G coverage in enterprise and industrial environments. These compact, interoperable units offer rapid deployment and high-capacity connectivity, addressing the need for reliable 5G infrastructure in sectors like manufacturing, logistics, and smart cities.

The Asia-Pacific 5G market is on a trajectory to dominate global growth. According to the GSMA's Mobile Economy Asia Pacific 2025 report, 5G connections in the region are expected to surge from 18% of mobile connections in 2024 to 50% by 2030. This expansion will drive over $1.4 trillion in economic value and create millions of jobs, underscoring the long-term investment potential in 5G-ready infrastructure. Nokia's solutions, which include private 5G networks and optical interconnects, are directly aligned with this trend.

AI Infrastructure: The Next Frontier

Nokia's AI strategy goes beyond hardware. The company's SR Linux network operating system and Event-Driven Automation (EDA) platform are designed to reduce human error in data centers, a critical factor as AI workloads grow. By automating network operations and enabling real-time adjustments, Nokia is helping clients like Empyrion maintain high performance while cutting costs.

The Asia-Pacific AI market, valued at $50.41 billion in 2023, is projected to grow at a 45.7% CAGR through 2030, reaching $734.76 billion. Nokia's partnership with Empyrion is a strategic bet on this growth, particularly as AI adoption accelerates in sectors like healthcare, finance, and telecom. The company's recent acquisition of Infinera for €2.3 billion has further strengthened its optical networking capabilities, enabling it to deliver 800Gbps solutions for AI-centric data centers.

Financials and Strategic Reorganization

Nokia's financials reflect the momentum of its infrastructure bets. In Q4 2024, the company reported a 9% year-on-year revenue increase, driven by its Network Infrastructure and Nokia Technologies divisions. The Network Infrastructure unit, now surpassing Mobile Networks in revenue, generated €1.9 billion in Q2 2025, fueled by demand for optical networking and AI solutions.

Under new CEO Justin Hotard (formerly of Intel's Data Center and AI Group), Nokia is streamlining operations to focus on high-growth segments. A unified go-to-market strategy is being implemented to eliminate internal silos and accelerate the delivery of end-to-end solutions—from 5G and fixed wireless access to AI-powered automation. This reorganization positions Nokia to capitalize on the $1.4 trillion economic value expected from mobile technologies in the Asia-Pacific by 2030.

Risks and Opportunities

While Nokia's expansion is promising, challenges remain. Rising spectrum costs and investment gaps in rural markets could slow 5G adoption. Additionally, the digital divide and cybersecurity risks must be addressed through policy and cross-sector collaboration. However, Nokia's focus on energy-efficient solutions and partnerships with hyperscalers like CoreWeave and Kyndryl mitigate these risks by aligning with global sustainability goals.

Investment Thesis

Nokia's partnership with Empyrion Digital is a microcosm of its broader strategy: leveraging cutting-edge technology to meet the surging demand for 5G and AI infrastructure in the Asia-Pacific. With the region's 5G and AI markets expanding at unprecedented rates, Nokia is well-positioned to benefit from both organic growth and strategic acquisitions.

For investors, the key takeaways are clear:
1. Nokia's Data Center Fabric and AI-optimized solutions are critical to addressing the $26.67 billion AI-optimized data center market by 2030.
2. The 5G rollout in Asia-Pacific, expected to reach 50% of mobile connections by 2030, will drive long-term revenue streams for Nokia's 5G and optical networking divisions.
3. The company's strategic reorganization and focus on automation and sustainability position it as a leader in the AI-driven infrastructure boom.

In a world where digital infrastructure is the new energy, Nokia's bets in the Asia-Pacific could yield outsized returns for those who recognize the opportunity early.