Nokia's Strategic Expansion in Malaysia's AI-Driven Data Center Market

Nokia’s strategic investments in Malaysia’s AI-driven data center market are reshaping its position as a key player in the Asia-Pacific digital infrastructure landscape. By partnering with Extreme Broadband (EBB) and its subsidiary Open DC, Nokia is deploying IP network solutions to interconnect six AI data centers across critical regions like Cyberjaya, Johor Bahru, and Penang. This initiative aligns with Malaysia’s National Cloud Computing Policy and addresses the surging demand from the banking and financial services sector for secure, high-performance networks [1]. The collaboration also includes a Memorandum of Understanding to develop quantum-safe networks and enterprise connectivity solutions, positioning Nokia at the forefront of next-generation infrastructure [2].

The financial rationale for investing in Nokia’s APAC expansion is bolstered by its recent acquisition of Infinera, which has enhanced its optical networking capabilities and access to hyperscale customers [3]. This move complements Nokia’s broader strategy to modernize data center infrastructure, as seen in its partnership with Maxis to upgrade cloud infrastructure in Malaysia [4]. The company’s focus on automation and energy efficiency—exemplified by its 7250 IXR routers and Event-Driven Automation (EDA) platform—addresses the exponential data demands of AI workloads while reducing operational costs [5].

Nokia’s long-term investment potential is further supported by the Asia-Pacific data center market’s projected growth. The AI-optimized segment alone is expected to expand at a 22.69% CAGR, reaching $26.67 billion by 2030 [6]. This growth is driven by 5G adoption and AI infrastructure demand, with Nokia’s 5G small cells and Kolibri solutions poised to capture a significant share of the $1.4 trillion economic value generated by 5G in the region by 2030 [7]. Additionally, Nokia’s Network Infrastructure division reported €1.9 billion in Q2 2025 revenue, underscoring its ability to scale operations amid rising capital expenditures [8].

While challenges such as currency fluctuations and tariffs may pressure short-term operating profits, Nokia’s strategic reorganization under CEO Justin Hotard—focusing on automation, sustainability, and AI-native infrastructure—positions it to outperform in the long term [9]. The company’s recognition as a “Visionary” in Gartner’s 2025 Magic Quadrant for Data Center Switching further validates its competitive edge in delivering scalable, secure solutions [10].

For investors, Nokia’s APAC expansion represents a compelling opportunity to capitalize on the AI-driven infrastructure boom. By aligning with government policies, hyperscale demand, and cutting-edge technologies like quantum-safe networks, Nokia is not only future-proofing its data center offerings but also securing a leadership role in a market set to redefine global digital ecosystems.

Source:
[1] Nokia Partners With Extreme Broadband To Upgrade AI Data Centers Across Malaysia
https://www.nasdaq.com/articles/nokia-partners-extreme-broadband-upgrade-ai-data-centers-across-malaysia
[2] Nokia to upgrade AI data centers across Malaysia with enhanced security and network performance
https://www.ainvest.com/news/nokia-upgrade-ai-data-centers-malaysia-extreme-broadband-improving-network-performance-security-2509/
[3] Nokia, AI, and data centers - an opportunity too good to ignore
https://www.datacenterdynamics.com/en/analysis/nokia-ai-and-data-centers-an-opportunity-too-good-to-ignore/
[4] Nokia to modernize data center infrastructure for Maxis
https://www.nokia.com/newsroom/nokia-to-modernize-data-center-infrastructure-for-maxis-mwc25/
[5] Nokia's Strategic Expansion in Asia-Pacific Digital
https://www.ainvest.com/news/nokia-strategic-expansion-asia-pacific-digital-infrastructure-gateway-5g-ai-driven-growth-2508/
[6] Nokia's Strategic Data Center Expansion in Malaysia and
https://www.ainvest.com/news/nokia-strategic-data-center-expansion-malaysia-implications-ai-driven-cloud-infrastructure-growth-2509/
[7] Nokia Partners with Empyrion Digital to Enhance Connectivity and
https://site.financialmodelingprep.com/market-news/nokia-partners-empyrion-digital-enhance-connectivity-asia-pacific
[8] Nokia's Strategic Expansion in Asia-Pacific Digital
https://www.ainvest.com/news/nokia-strategic-expansion-asia-pacific-digital-infrastructure-gateway-5g-ai-driven-growth-2508/
[9] Telco Nokia Dives Deeper into AI, Data Centers
https://channelpartnersconference.com/news/telco-nokia-dives-deeper-ai-data-centers
[10] Nokia recognized as a Visionary in 2025 Gartner Magic
https://www.nokia.com/newsroom/nokia-recognized-as-a-visionary-in-2025-gartner-magic-quadrant-for-data-center-switching/