The resurgence of Nokia thanks to AI

CopenhagenIt was the early 2000s and almost everyone carried in their pocket a small, simple, and robust mobile phone, the Nokia 1100, which became the best-selling mobile phone in history, and still holds that record today. In those days, the Finnish technology company controlled 26% of the global telephony market share and brought to market another device that would mark an entire generation with more than 126 million units sold. It was the Nokia 3310, also known as the "brick" for its reputation for being indestructible in everyday drops.

Until 2008, the popularity and value of Nokia only continued to climb, reaching its peak when Nokia produced more than 14 phones per second and the company came to represent 4% of Finland's GDP. But then came the iPhone, Apple's first smartphone, which opened the door to a new era, also driven by the launch of Android, Google's operating system. Nokia did not know how to adapt to the new times; its devices became outdated and were surpassed by the new generation of devices. Sales collapsed and the brand, which had dominated the sector, ended up becoming, over the years, a symbol of technological nostalgia.

Despite having hit rock bottom, the Finnish company managed to withstand the blow, until two decades later it is resurging with strength thanks to the wave of artificial intelligence. Its stock market valuation has soared 70% in 2026 and during the month of September the company managed to enter the list of the 50 companies with the highest market capitalization in the euro zone. Nokia no longer manufactures phones – it sold its devices and services division to Microsoft in 2014–, but it has returned to its industrial roots and now dedicates nearly half of its business to the development of telecommunications infrastructure. But the new engine of its growth is the technology that makes possible the operation of the data centers that fuel the artificial intelligence boom, a market that already represents 30% of the company's turnover.

The Finnish company supplies the equipment and software that allow managing and distributing data traffic to the data centers that make artificial intelligence possible, including the devices that connect servers and route information to its destination. If fiber optic cables are the roads through which data travels, Nokia's technology acts as a transport and logistics network that organizes the traffic. The company's CEO, Justin Hotard, has defined these products as “the backbone of the AI economy”.

Ability to reinvent itself

With a growing demand for the necessary infrastructure that supports AI, Nokia has been able to seize this opportunity, “partly thanks to a company strategy and partly thanks to luck,” explained Niklas Jensen-Eriksen, a professor of business history at the University of Helsinki, as the company has been favored by its experience in manufacturing optical networks acquired long before it became known for its mobile phones.

In fact, the company's main success, points out Jensen-Eriksen, “has been knowing how to reinvent itself repeatedly throughout history.” Founded in 1865 as a pulp mill on the banks of the Nokia River, the company evolved by manufacturing rubber rain boots, before entering the telecommunications sector with the production of cables. With the dot-com bubble crisis, in 2000 it lost 97% of its market capitalization, which led to the collapse of the brand, until 2021, when the value of its shares hit rock bottom. Now, with the comeback thanks to the push from AI, it has placed the value of its shares at the highest level since 2008.

Nokia's transformation has had a very significant endorsement. Nvidia, the most coveted chip manufacturer of the moment, bought a 2.9% stake in the company for $1 billion a year ago, as part of a collaboration agreement between the two companies, which sent Nokia's shares soaring by 20% in a single day. At the same time, Nokia has announced an agreement with ICEYE, one of the leading European companies in satellite development, with the aim of strengthening European space capabilities and reducing the dependence of European countries on Starlink, Elon Musk's satellite network. In this sense, Jensen-Eriksen believes that, in a global context of geopolitical tensions, the company has known how to take advantage of the situation: “When we Europeans consider how we can strengthen ourselves in this regard so as not to depend exclusively on China and the United States, Nokia is an obvious company that can benefit from it, as it is one of the European technology leaders,” he says.

However, being part of the AI expansion also entails risks for Nokia. According to UBS, the optical networks division depends directly on investments in data centers, so any slowdown in their expansion would have an immediate impact on the Finnish company's business. In recent months, proposals have already emerged to regulate controversial data centers due to their environmental cost, while more voices are calling for limiting the development of AI, a fact that fuels fears of a slowdown in investments by large technology companies.