Monday it was Qualcomm. Tuesday it was Nokia. Every day, something else soars 20% or more “because AI.”
If you’re “old” like me, you remember Nokia for classics like the 3310, one of the greatest cellphones ever manufactured. Before that there was the 5160, which was chunky enough to double as a weapon.
But that was then. Ah, the good old days. These days Nokia’s known for… I have no idea if I’m honest. I don’t know what they do in 2025. But Jensen Huang does, and he likes it (what they do) enough to give them a billion of his pocket change for another one of Nvidia’s “strategic partnerships.” He announced several such deals on Tuesday during a company event dubbed “the AI Super Bowl” in D.C.
Nokia will use Huang’s money “to accelerate its plans to advance trusted connectivity for the AI supercycle,” a press release said. In other words: They’ll use Nvidia’s money to do things that’ll eventually benefit Nvidia.
As the chart shows, the market loved it. The rally in Helsinki was the largest since 2013. The ADRs jumped the most since 2021 to their best levels in a decade.
At the Nvidia event, Huang went into some detail about the partnership. Nokia will receive a wireless device that’ll do AI things while directing mobile traffic. “Nokia’s going to work with us to integrate our technology and rewrite their stack,” Huang remarked. To which investors said, in unison, “Whatever, man. Just take our money!”
Needless to say, the Nokia tie-up — and some of the other partnerships Nvidia unveiled on Tuesday — is just another one of “those deals,” where that means the sort of arrangement which has Wall Street veterans seeing ghosts from the dot-com bubble. A lot of these strategic partnerships look like an effort on Nvidia’s part to effectively fund purchases of its technology and finance other companies’ entry into the AI ecosystem it dominates. Like this: “The more the merrier, because it’ll all accrue back to us in the end.”
The concern’s always the same: Everything — every last bit of it, from Nvidia’s deal spree to explosive hyper-scaler capex — hinges on the assumption that demand for AI will be insatiable. Right now, that seems like a good bet. But most assumptions which, in hindsight, look misguided seemed like foregone conclusions in the moment. Don’t forget that.
At the same event in Washington, where announced deal partners ran the gamut from Palantir to Eli Lilly to Uber, Huang was characteristically — which is to say unequivocally — enthusiastic about the future and even more so about Nvidia’s role in shaping it. AI’s not a bubble, he insisted, to anyone who’d listen.
Oh, and he made sure to pay homage. The last four words of his keynote address were “making America great again.” The stock hit a new record.
Nokia sold their handset business to Microsoft years ago to focus on the production of base station equipment. Their shares briefly attracted investor interest when the US started to pressure global telecom carriers to boycott gear from Huawei and even tear out Huawei equipment already in place. There even was some chatter about the US Government buying Nokia or Erikson for national security reasons.
Gary Marcus, quoting Scott Galloway yesterday:’’ China has had it with America’s sclerotic trade policy. If I were advising Xi, I would say this: If you think of America as an adversary, understand that America has essentially become a giant bet on AI. If the Chinese can take down the valuations of the top 10 AI companies — if those 10 companies fall 50, 70, even 90% like they did in the dot-com era — that would put the U.S. in a recession and put Trump out of vogue.
How can they do that? Pretty easily. I think they’re going to flood the market with cheap, open-weight models that require less processing power but are 90% as good. The Chinese AI sector, acting under the direction and encouragement of the CCP, is about to Old Navy the U.S. economy: They’re going to mess with America’s big bet on AI and make it not pay off.’
https://garymarcus.substack.com/p/could-china-devastate-the-us-without
The Nokia 8110 is the phone they used in The Matrix. Seriously sexy phones.
They will use NVIDIA’s money (fortress balance sheet, prodigious cash flow) to….benefit NVIDIA !! What a wonderful way to “prime the pump” and get the flywheel goin’ !!
The demand isn’t going to come soon enough and a lot of the stocks will fall back until a few years later, when it picks up to the level needed to sustain these prices.
Relatedly, I read about META’s arrangement to finance its $30BN Hyperion datacenter entirely off balance sheet. According to the article, which I have not checked, other hyperscalers are also financing their AI datacenters off balance sheet. The appetite of bond investors for this stuff is apparently ample. My takeaway is that hyperscalers’ FCF is no longer a constraint. Bullish.
If anyone is concerned about US AI policy that looks a lot like our social media policy on steroids with a diet of high protein shakes and wagyu stakes, have a look at https://replacement.ai/
It’s actually not a joke.