Shares of Nokia Corp. closed 21% higher today after Nvidia Corp. announced plans to take a $1 billion stake in the telecommunications equipment maker.

The investment is part of a partnership that will see the companies collaborate on new radio access network, or RAN, products. RAN is a telecommunications industry term that covers 5G base stations and certain related hardware.

Finland-based Nokia is among the world’s largest makers of 5G base stations. It also sells software that carriers use to find ways of optimizing their network infrastructure, manage subscriber data and perform related tasks. Nokia generated €4.82 billion in revenue across those product lines in its most recent fiscal quarter.

The company’s new partnership with Nvidia focuses on an offering called the Arc Aerial RAN Computer Pro, or ARC-Pro, that the chipmaker debuted today. It’s a reference design that server manufacturers can use to make computing appliances for internet providers. The appliances will have a ruggedized form factor capable of operating in subfreezing temperatures.

According to Nvidia, each ARC-Pro system includes a workstation-grade Blackwell RTX PRO graphics processing unit. The chip is based on the same architecture as the company’s flagship data center GPUs. There’s also a 72-core Grace central processing unit, as well as network interface cards that link the system to other components of a carrier’s infrastructure.

Internet providers can install ARC-Pro systems next to their cell towers and use them to run artificial intelligence software. A carrier could, for example, deploy a neural network that automatically optimizes 5G base stations’ power usage. 

Nvidia says ARC-Pro can also help carriers prepare their networks for the future switch to 6G, the planned successor to 5G. The system is designed to ease the implementation of 6G features such as ultra MIMO. The feature, which is still under development, will increase the amount of data traffic that base stations can process by equipping them with more antennas.

Nokia plans to integrate the ARC-Pro into its network equipment portfolio. Additionally, the company will make it easier to use its 5G and 6G applications with Nvidia’s CUDA toolkit. Developers use the latter software to run AI models on the chipmaker’s GPUs.

“The next leap in telecom isn’t just from 5G to 6G — it’s a fundamental redesign of the network to deliver AI-powered connectivity, capable of processing intelligence from the data center all the way to the edge,” said Nokia Chief Executive Officer Justin Hotard. “Our partnership with Nvidia, and their investment in Nokia, will accelerate AI-RAN.”

Nvidia and Nokia will team up with T-Mobile US Inc. to test their AI-RAN offerings. According to the companies, the carrier will begin trials next year as part of its efforts to ready its infrastructure for 6G. The initial tests will focus on measuring the technology’s performance and efficiency. 

Photo: Nokia