http://www.iccsz.com/site/cn/News/2024/10/18/20241018022506668986.htm

Abstract: Pekka Lundmark, CEO of Nokia, said that the telecom market is no longer a growth market, but Nokia is very optimistic about the outlook for the data center market.

ICC News Nokia CEO Pekka Lundmark said on its third-quarter 2024 earnings call that telecommunications is no longer the company's top growth market. Instead, the company shifted the focus of growth to the data center. "There will be other areas, but that will be the number one priority." He said.

- During the Q3 2024 earnings call, Lundmark said, "Telecom will not be a growth market for Nokia. ”

- Conversely, the CEO expressed optimism about the company's growth prospects for entering the GPU-as-a-service market.

- The agreement with CoreWeave in September is leading the company in the direction of the data center.

Moving away from the telecom business is alarming, but it's not surprising given the challenges companies have faced in winning major telecom contracts over the past year. However, a deal with AI hyperscaler CoreWeave in September gave Nokia a new lease of life. CoreWeave selected Nokia to deploy its IP routing and optical transport equipment globally as part of its extensive backbone build-up and immediately deploy in data centers in the United States and Europe.

Raymond James Analyst Simon Leopold said winning the CoreWeave order is good news for Nokia because it would give Nokia some exposure to the AI space, and he was curious if Nokia has a long-term strategy to shift customers away from a telecom base and more enterprise-level opportunities.

Lundmark responded: "It's clearly at the heart of our strategy. He said Nokia's total addressable market (TAM) in the telecommunications sector is 84 billion euros, compared to 20 billion euros in the current total addressable market for data centers.

"While we expect a recovery in telecom TAMs next year, we have to be realistic," Lundmark said, "I mean, telecom TAMs are no longer a significant growth market. ”

In contrast, data centers are a growth market.

"What makes CoreWeave so important is that they are now the leading GPU-as-a-Service company," said Lundmark. "They've taken almost our entire portfolio, both on the IP side and on the optical side. We know that AI is driving new business models, and one of the obvious ones is GPU-as-a-Service. ”

He said T-Mobile mentioned GPU-as-a-Service at its recent Capital Markets Day. "They're talking about seeing it as an added opportunity for their business," Lundmark said. "Of course, there are also great opportunities for the company to grow in the hyperscale data center and small data center space."

Once Nokia completes its $2.3 billion acquisition of optical communications provider Infinera in the first half of 2025, he said, Nokia will host a capital markets day where "we'll dive into growth areas other than telecommunications." ”

He said Nokia has already made a good foray into the data center market on the IP side, and the subsequent Infinera deal will significantly increase the company's engagement in optics. Data centers need not only GPUs, but also optical networks to support their AI workloads.

Lundmark says the role of optics will increase not only in the connection between data centers, but also in the connection between servers within the data center. "Once that stage is reached, the size of the market is going to be huge." He said.

By Linda Hardesty, Managing Editor, Fierce Network

Original link: Forget telco. Nokia’s CEO says data centers are top growth target |

  https://www.fierce-network.com/cloud/nokias-ceo-says-data-centers-will-be-its-number-one-growth-target