Nokia announces strategy shift towards AI, cloud infrastructure, data center networking, and 6G
Nokia introduced a new strategy at its Capital Markets Day 2025 aimed at positioning the company to engage with the AI-driven transformation of networks and capitalize on the value of the Artificial Intelligence (AI) supercycle. To align its operations more effectively, the company developed updated long-term financial goals, strategic KPIs, an evolution of its operating model, and alterations in its Group Leadership Team. The reorganization will commence on January 1, 2026, as Nokia moves to simplify its operational structure into two primary segments: Network Infrastructure and Mobile Infrastructure.
The revised corporate strategy outlines five strategic priorities, including growth in AI and cloud, leadership in the Edge Resource Allocator (ERA) of mobile connectivity, collaboration with partners, focusing capital for differentiation, and unlocking sustainable returns. Nokia aims to achieve an annual comparable operating profit target ranging from EUR 2.7 billion to EUR 3.2 billion by 2028.
Nokia’s Network Infrastructure segment will center on the AI and data center market, expected to benefit from rapid global expansion. This segment will be led by David Heard, incorporating Optical Networks, IP Networks, and Fixed Networks. Meanwhile, the Mobile Infrastructure segment will include Nokia’s Core Networks and Radio Networks and be guided by CEO Justin Hotard. It is positioned to address advancements toward AI-native networks and the development of 6G technologies.
Leadership changes were also announced, with Raghav Sahgal appointed as Chief Customer Officer, and Patrik Hammarén continuing in a leadership role focusing on Technology Standards. Additionally, Nokia plans to reallocate certain non-core units into a group labeled Portfolio Businesses, where the future strategies will be assessed by the end of 2026, potentially leading to divestitures.
A new incubation unit, Nokia Defense, will focus on developing defense-grade solutions using the company’s existing technologies. Strategic KPIs have been outlined to reflect the expected results from the new strategy, targeting growth rates for Network Infrastructure net sales and operating margins.
Nokia's recent strides include forming partnerships such as the $1 billion investment from Nvidia aimed at developing AI-RAN products. These initiatives illustrate the company’s intent to strengthen its presence in AI and data center networking, driving forward with high-performance products and addressing market needs through enhanced solutions.