Washington: Nokia announced on Tuesday that chipmaker Nvidia will take a $1 billion stake in the networking company. Nokia stated that the company will issue more than 166 million new shares, with the proceeds earmarked to support its AI initiatives and other general corporate purposes.

According to Anadolu Agency, the two companies have also agreed on a strategic partnership to jointly develop next-generation 6G technology. The collaboration will focus on AI networking solutions and explore opportunities to incorporate Nokia’s data center switching and optical technologies in Nvidia’s future AI infrastructure architecture.

The announcement comes ahead of Nvidia CEO Jensen Huang’s keynote at the company’s developer conference in Washington, DC, where he is expected to discuss some of the joint projects and future plans with Nokia. In recent months, Nvidia has acquired stakes in several strategic partners as it emerges at the forefront of the AI industry. Following the announcement, Nokia’s shares jumped as much as 26%.