Athira Sethu
Kochi, 11 February 2025
Finnish telecom company Nokia said that Pekka Lundmark will leave the CEO position, which will be assumed by Justin Hotard starting April 1. Hotard, who is at present executive vice president and general manager of Intel’s Data Center & AI Group, has experience in technology areas such as AI and data centers, which will be crucial to Nokia’s growth in the future.
Telecom companies such as Nokia face challenges with the slower sales of 5G equipment and now look to move into emerging areas like artificial intelligence to spur growth. The Chairman of Nokia, Sari Baldauf, said Hotard has a good track record in accelerating growth for tech companies, and his AI and data center market expertise were a plus.
Nokia’s stock rose 1.6% following the announcement. Analysts from JPMorgan were surprised by the CEO change, noting that Lundmark had successfully stabilized the company since becoming CEO in 2020. They believe the appointment of Hotard signals a focus on Nokia’s Network Infrastructure unit, where investments in AI and data centers are creating new growth opportunities.
Nokia is not a stranger to this trend; the company has already acquired the U.S. optical networking company Infinera at a price of $2.3 billion to take advantage of the increasing investment in data centers pushed by AI. Lundmark will stay in the company as an advisor to Hotard until the end of the year.
According to Baldauf, this succession plan was for sometime, with Lundmark wanting to leave once the business was better prepared for the future, at least when the right successor was being found. During the past year, Nokia’s stock has surged about 28% but it is still down over 90% from its peak in June 2000. The company’s infrastructure business talks about integrating AI to their communication systems, which they are working on in terms of data centers and routers; mobile networks, on the other hand, deals with cell towers and 5G technology.
