6thWave: AI News Hub

Nokia’s acquisition of Infinera is a strategic move to diversify its markets and tap into the growing area of artificial intelligence. The deal, valued at 20% of the optical networking market, would make Nokia the second-largest vendor in the market, behind Huawei. Nokia CEO Pekka Lundmark believes the timing is optimal, as the market is expected to start recovering soon. The acquisition would increase Nokia’s exposure to data centers, which are driving significant investments in optical transport networks. Infinera’s strength in intra-data center communications would be a key attraction, as this segment is expected to be one of the fastest-growing in the overall communications technology market. Shareholders seem to be bullish about the deal, with Nokia’s shares rising 4% in morning trade. While the purchase multiple may be steep, Nokia expects to save 200 million euros in costs following the deal’s closure next year. The acquisition would also provide a complementary transaction, with Infinera’s strong presence in the US market and Nokia’s bigger share in Europe and Asia.

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