Nvidia takes $1 billion stake in Nokia, sending the 5G equipment maker’s shares up 22%

Nokia announced on Tuesday that Nvidia is taking a $1 billion stake in the networking company, the latest partnership for the artificial intelligence chipmaker.

Shares of Nokia soared 22% higher following the news.

Nokia will issue more than 166 million new shares and will use the proceeds to fund its plans for AI and other general corporate purposes.

The two companies also struck a strategic partnership to work together to develop next-generation 6G cellular technology. Nokia said that it would adapt its 5G and 6G software to run on Nvidia’s chips, and will collaborate on networking technology for AI.

Nokia said Nvidia would consider incorporating its technology into its future AI infrastructure plans.

Nokia, a Finnish company, is best known for its early cellphones, but in recent years, it has primarily been a supplier of 5G cellular equipment to telecom providers.

The announcement comes as Nvidia CEO Jensen Huang prepares to address an audience of policymakers and government leaders in Washington, D.C., to keynote the company’s developer conference.

Nokia and Nvidia are expected to discuss some of their collaborations and plans at the conference.

Nvidia has taken several equity stakes in strategic partners in recent months as the company has found itself at the center of the AI world.

In September, it committed a $5 billion investment to one-time rival Intel, and said it would invest $100 billion in OpenAI. It also committed $500 million in self-driving car startup Wayve and a $667 million investment in U.K. cloud provider Nscale.