Nokia taps the AI boom in a deal with this U.S. optical network firm

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[Photo: Albert Gea/File Photo/REUTERS]

Nokia’s bid to buy U.S. optical networking gear maker Infinera in a $2.3 billion deal puts the Finnish company on track to gain from the billions of dollars in investment pouring into data centres to cater to the rise of artificial intelligence.

The deal would help Nokia to leapfrog Ciena and become the second largest vendor in the optical networking market with a 20% share, behind Huawei, which is benefiting from the minimal presence of Western companies in China.

Telecom gear makers, struggling with lower sales of 5G equipment, have been looking for ways to diversify their markets and get into growing areas such as AI.

Nokia’s move will allow the company to sell more equipment to big tech companies such as Amazon, Alphabet and Microsoft as they invest billions of dollars in building new data centres to service the artificial intelligence boom.