Deployment record
- Organisation
- Nokia
- System
- anyRAN
- Stage
- Live
- Function
- mobile networks
- Built on
- NVIDIA’s Aerial RAN Computer
20%spectral efficiency gains
- 01Nokia’s AI and cloud net sales grew 123% year-over-year, representing 12% of total group net sales.
- 02Order intake for AI and cloud increased by 118% year-over-year to EUR 1.5 billion gross.
- 03Demand for connectivity in AI and cloud is described as massive and insatiable by CEO Justin Hotard.
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Nokia CEO Justin Hotard said on the company’s Q3 2026 earnings call on October 22, 2026 that AI and cloud has become Nokia’s fastest-growing business.
AI and cloud “net sales grew 123% year-over-year and represented 12% of total group net sales,” Hotard said. “Order intake was strong again, up 118% year-over-year to EUR 1.5 billion gross.”
CFO Marco Wiren said AI and cloud was “again the fastest-growing segment,” adding that “we are confident in the growth potential for AI and cloud given our backlog and pipeline.”
Asked about the scale of demand, Hotard said “the demand for connectivity in AI and cloud is massive and it’s insatiable.”
Optical, IP, and the Supply Constraint
The growth is concentrated in Nokia’s Network Infrastructure business, where net sales rose 15%. “Demand from AI and cloud drove IP Networks to grow 43% year-over-year,” Hotard said, while Optical grew 18%.
Hotard tied that demand to how AI infrastructure is being built. “That means more AI compute in more places requiring more optical and IP capacity to connect them,” he said. “If compute is constrained, connectivity becomes another way to maximize the access.”
Nokia’s shipments of 800G coherent pluggables more than doubled sequentially, with design wins at 29 customers. The company secured two additional hyperscaler IP design wins, including a next-generation data center gateway.
Hotard said Nokia is working with Zayo on a blueprint for connecting distributed inference across data centers, and with Google to support its EUR 13 billion investment in Finland by connecting AI infrastructure within and between data centers.
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“For 2027, we now expect these businesses to grow between 25% and 30% on a combined basis,” Hotard said of Optical and IP, adding that Optical may contribute more of that growth than IP.
“We’re very supply constrained,” Hotard said of the Optical business. He said Nokia’s San Jose fab, producing 6-inch indium phosphide, is on track to begin production before year-end, with 24/7 operations starting this month.
He also said the demand is affecting costs. Wiren said AI and cloud “bring very strong incremental gross profit and is accretive to operating margin as well,” describing the dilution in IP margins in the quarter as temporary.
AI RAN and the NVIDIA Partnership
On mobile networks, Hotard said that they are transforming the radio network into a platform for physical AI and that Nokia is “positioning Nokia to lead this shift in partnership with NVIDIA.” Nokia’s anyRAN software runs on NVIDIA’s Aerial RAN Computer.
He said T-Mobile completed a first live voice call over AI RAN on its production network, and that Elisa ran voice, data, and AI workloads simultaneously on the same platform.
Nokia has “already demonstrated spectral efficiency gains of more than 20%” in live environments, against a target of 100% by 2028. Nineteen customers are working with Nokia on AI RAN.
Hotard also said Nokia is seeing subsea and telco investment linked to AI traffic, and expects physical AI to drive persistent demand for connectivity.
Nokia reported Q3 2026 net sales up 9% at constant currency, with operating profit of EUR 605 million and an operating margin of 11.7%, up 220 basis points. Mobile Infrastructure net sales rose 5%, with Radio Networks up 10%.
The company kept its comparable operating profit guidance unchanged, saying it is tracking above the midpoint, and expects Q4 net sales to rise 20% to 24% sequentially.
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