Nokia, the Finnish telecommunications giant, is making strategic moves to position itself at the forefront of the artificial intelligence (AI) revolution. The company has announced the establishment of a new AI department and appointed Pallavi Mahajan, a former Intel executive, to lead its Technology and AI Organization.

New Leadership for AI and Technology

Mahajan, who previously served as corporate vice president and general manager of Intel's data center and AI group, brings a wealth of experience to her new role at Nokia. Her appointment signals Nokia's commitment to strengthening its AI capabilities and expanding its presence in the data center market.

The newly formed Technology and AI Organization will house Nokia's research and development center, including the prestigious Nokia Bell Labs. This department is set to collaborate closely with the company's network infrastructure division, focusing on developing cutting-edge technology that connects data centers.

Strategic Shift Under New CEO

This strategic realignment is being orchestrated under the leadership of CEO Justin Hotard, who also has a background with Intel. The move reflects Nokia's ambition to capitalize on the burgeoning AI market and compete more effectively with networking companies like Ciena Corp.

By focusing on connecting data centers, Nokia aims to diversify its customer base, a crucial step as telecommunications operators have been reducing their spending. This pivot could open up new revenue streams and market opportunities for the company.

Additional Executive Appointments

In a related move, Nokia has also hired Konstanty Owczarek as its new chief corporate development officer. Owczarek will oversee the company's mergers and acquisitions activities, as well as manage Nokia's investment vehicle, NGP Capital.

Leadership Transition

Both Mahajan and Owczarek are set to join Nokia's leadership team on October 1. Concurrently, Nishant Batra, the current head of technology and strategy, will be stepping down from his position at the end of September, marking a significant transition in Nokia's executive ranks.

Conclusion

These organizational changes and strategic appointments demonstrate Nokia's determination to adapt to the evolving technological landscape. By leveraging AI and focusing on data center connectivity, the company is positioning itself to capture new opportunities in the rapidly changing telecommunications and technology sectors.

Nokia , the Finnish telecom equipment giant, saw its shares tumble over 8% following a significant downward revision of its full-year operating profit forecast. The company, grappling with currency fluctuations and increased tariff costs, has adjusted its outlook in response to challenging market conditions.

Revised Profit Forecast

Nokia has reduced its full-year operating profit forecast to a range of €1.60-2.10 billion, a substantial decrease from its previous guidance of up to €2.40 billion. This adjustment reflects the company's response to ongoing economic pressures and market uncertainties.

Factors Impacting the Forecast

The revised outlook is primarily attributed to two key factors:

1. Currency Fluctuations: Nokia reported a €230 million hit due to currency movements, with the US dollar fluctuations playing a significant role.
2. Increased Tariff Costs: The company expects additional tariff-related expenses ranging from €50 million to €80 million for the year.

Second-Quarter Performance

Nokia's financial challenges are further highlighted in its second-quarter performance:

The company's second-quarter net sales have fallen short of market expectations, underscoring the difficulties faced by network equipment manufacturers in the current economic climate.

Industry-Wide Challenges

Nokia's situation reflects broader challenges in the telecom equipment sector:

• Delayed 5G Rollouts: Operators are postponing 5G network deployments amid economic uncertainty.
• Industry-Wide Impact: Rival Ericsson has reported similar effects from currency fluctuations and tariff increases.

The revised forecast and market reaction highlight the sensitive nature of the telecom equipment industry to global economic factors and trade policies. As Nokia navigates these challenges, investors and industry observers will be closely watching the company's strategies to mitigate these impacts and maintain its competitive position in the evolving 5G landscape.