- Nokia says demand for optical connectivity is surging as AI workloads reshape data centre networks.
- The company expects its Infinera acquisition to expand scale and strengthen its position with hyperscale cloud providers.
What happened: Nokia outlines AI-driven networking strategy
In an interview with Capacity, Nokia executives outlined how artificial intelligence is reshaping demand for optical networking and data centre connectivity.
The discussion followed Nokia’s $2.3 billion acquisition of Infinera, which the company says will strengthen its optical networking portfolio and accelerate product development across data centre and backbone networks. Details of the strategy and integration plans were discussed in the Capacity interview.
Manish Gulyani, senior vice president and chief marketing officer for Nokia’s Network Infrastructure division, said the surge in AI computing is creating new networking requirements that extend from the data centre edge to long-haul fibre networks.
Data centre connectivity now spans three main layers: regional interconnect between facilities, campus-style connections linking multiple buildings, and short-range optical links inside data halls. Each tier demands greater capacity, low latency and lower power consumption.
Industry demand is rising quickly. Around 11,000 data centres operate globally today, and the number could double within five years, creating enormous requirements for high-capacity networking infrastructure.
By combining Nokia’s global footprint with Infinera’s optical expertise and hyperscale customer base, the company hopes to scale production and compete more aggressively for contracts with large cloud providers.
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Why this is important
The interview highlights how telecom equipment vendors are repositioning themselves around the infrastructure needed to support AI.
Most discussion about artificial intelligence focuses on chips and compute. However, large-scale AI systems require enormous volumes of data transfer between servers, data centres and cloud regions. Networking capacity must expand in parallel with computing power.
That shift is already influencing the telecom equipment market. Demand for optical transport equipment has surged as hyperscalers build new data centres and distribute workloads across multiple sites. Analysts note that spending on data centre infrastructure has been rising rapidly as AI deployments scale globally.
For Nokia, strengthening its optical portfolio also helps diversify beyond traditional telecom operators. Hyperscale cloud providers and enterprise infrastructure projects are now some of the fastest-growing buyers of high-capacity networking technology.
The move also reflects a broader industry transition. Modern data centres increasingly operate as distributed campuses, sometimes spread across several buildings or kilometres apart, requiring ultra-low-latency links to function as a single system.
As AI workloads continue to expand, networking is moving from a supporting role to a central component of digital infrastructure. Vendors that can deliver scalable, power-efficient connectivity are likely to capture a larger share of the AI infrastructure market.
