Nokia is splitting off its AI business, weeks after $1bn Nvidia investment

• Nokia creates a new business specifically to grow AI mobile networks, like 6G
• The move comes weeks after Nvidia pledged $1 billion to help develop 6G
• Nokia also wants to drastically reduce operating expenses

Nokia has revealed plans to reposition itself as a leader in AI network transformations, including developing AI-first mobile networks such as 6G.

Beginning January 1, 2026, the company will operate across two main segments – network infrastructure and mobile infrastructure.

Networks will cover optical networks, IP networks and fixed networks, with the company targeting around a 6-8% net sales compound annual growth rate between now and 2028.

Nokia to spin off its AI mobile business from 2026

The company explained its networks business will be positioned perfectly to capture the growing AI and data center build-out.

It’s the mobile infrastructure business that’s set to see the biggest returns, though, with Nokia targeting 48-50% in gross margin by 2028.

“Nokia changed the world once by connecting people – and will again by connecting intelligence,” CEO Justin Hotard explained.

The news comes barely a month after Nvidia confirmed a $1 billion investment into Nokia, with the cash set aside to help progress 6G technology development. Hotard described the transition from 5G to 6G as “a fundamental redesign of the network,” emphasizing the role of AI.

With the shift comes a change to leadership, with a new Chief Customer Officer at the helm. Network Infrastructure will be headed up by David Heard, as it is already, and the Mobile Infrastructure will be temporarily run by group CEO Justin Hotard until a suitable leader is identified.

Nokia also declared plans to drastically reduce operating expenses from €350 million to €150 million by 2028. The company raked in €4.83 billion in its most recent quarter, reflecting 12% year-over-year growth.

Hotard confirmed Nokia is still on track to achieve its full-year outlook.

To simplify reporting, the company also shifted several non-core units to a new Portfolio Businesses, generating three distinct subdivisions together with Network and Mobile Infrastructure.

Nokia shares are back on their way down around 7% after reaching an early-November high.

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