Every network boom starts with a new kind of user.
First it was people making calls. Then it was phones streaming video, and most recently, it was data centers training artificial intelligence.
For most of the past decade, Nokia rode those waves from the back of the room. The brand that once ruled the phone in your pocket became a quieter business selling the gear that carries your calls, streams, and data.
AI has already handed Nokia a second act. Data centers need faster connections, and the company’s optical and internet networking units are growth businesses again.
Nokia’s chief executive now says the next user won’t be a person at all. It will be machines: robots, vehicles, and equipment that act in the real world and need fast, reliable networks.
If you own Nokia shares, or a fund that holds them, that pitch comes with a price tag worth understanding. It is the part of the Oct. 22 report I spent the most time on.
Nokia (NOK) CEO Justin Hotard made his case for physical AI in an Oct. 22 interview with CNBC, the same day Nokia reported a 35% jump in comparable operating profit to €605 million. In the same interim report, it lowered its free cash flow outlook.
Why robots need a new kind of network
Physical AI means software that senses and acts in the real world, from warehouse robots to self-driving cars. Hotard’s written statement put it plainly: “AI-native networks are moving into the physical world.”
The idea is that those machines will need fast, reliable wireless links, not just data center fiber. Nokia said in April that AI already accounts for about 20% of network traffic and that machine-to-machine traffic will eventually dominate, according to Fierce Network.
Nokia is building toward that with what it calls AI-RAN, radio networks that run AI directly on cell sites. Together with T-Mobile and Nvidia (NVDA), Nokia completed what Hotard called “the world’s first AI-RAN call in a live operator network,” according to the report.
Related: Nokia CEO’s ‘2x faster’ AI claim comes with a catch for investors
Early results are encouraging. Deutsche Telekom’s lab tests showed typical uplink speed gains of 10% to 15% from AI-based channel estimation, with field tests next, Nokia said in an Oct. 21 announcement.
The timeline is still long. Finnish carrier Elisa expects commercial services in 2027, and BT is preparing a live trial in Birmingham that same year, according to the announcement.
Joe Madden, lead analyst at Mobile Experts, told SDxCentral that Nokia is “betting the farm” on physical AI.
