Nokia announced on Tuesday (October 28) that Nvidia will invest $1 billion in the networking technology company. This is the latest partnership for the AI ​​chip maker.

Following the announcement, Nokia's stock price surged 22%.

Nokia will issue over 166 million new shares, with the proceeds used to fund its AI-related initiatives and other general corporate operations.

The two companies also entered into a strategic partnership to jointly develop next-generation 6G communication technology. Nokia stated that it will adapt its 5G and 6G software to run on Nvidia's chips and will collaborate on AI networking technologies.

Nokia said that Nvidia will consider integrating Nokia's technology into its future AI infrastructure plans.

Nokia, a Finnish company best known for its early mobile phones, has largely transformed itself in recent years as a supplier of 5G communication equipment to telecom operators.

This collaboration announcement comes as Nvidia CEO Jensen Huang prepares to speak to policymakers and government leaders in Washington, D.C., and is scheduled to be a keynote speaker at the company's developer conference.

Nokia and Nvidia are expected to discuss some of their collaboration and plans at the conference.

In recent months, Nvidia has been at the heart of the artificial intelligence field, making equity investments in several strategic partners.

In September, Nvidia pledged $5 billion to its former rival Intel and announced a $100 billion investment in OpenAI. In addition, Nvidia committed $500 million to self-driving car startup Wayve and $667 million to UK cloud service provider Nscale.