Nokia sues Amazon, HP over video patent infringement Credit: Nokia Nokia’s chief executive Justin Hotard says the industry would build data centres twice as fast if memory and energy supply allowed, and that demand would hold even without a new frontier model for three years. Bain and a paper presented at the Brookings Papers on Economic Activity both question whether the revenue exists to pay for what is already being built. Nokia’s chief executive says the industry would build data centres twice as fast if it could. Justin Hotard told CNBC that nothing about the present pace counts as overbuilding.
A paper presented in Washington last month puts the eventual bill at $10.3T. “If we could build 2x faster, our customers could build 2x faster, they probably would,” he said on CNBC’s The Tech Download podcast. That is why he thinks the buildout is still early. Memory chips and energy are the shortages he named. Hotard ran Intel’s data centre and AI group before Nokia hired him in 2025.
He also said the demand does not depend on new models arriving. “Even if we didn’t have another frontier model released in the next three years, we could probably make tremendous progress just deploying the technology that’s there today,” he said. Nokia sells the connections rather than the chips, making the equipment that links racks inside a data centre and links data centres to each other. Those sales doubled to EUR 446M in the second quarter, against group sales of EUR 4.82B. The shares are up about 130% in a year.
The memory shortage he names has already reached European shelves, with DDR5 prices in Germany up 414% in a year and memory taking as much as half the bill of materials on a budget phone. Not everyone accepts that the demand will be there. Bain said last week that AI needs $6T a year by 2031 to pay for the data centres now being built, against the $1.2T to $1.8T that today’s products could generate. Stijn Van Nieuwerburgh’s paper for the Brookings Papers on Economic Activity puts investment at $10.3T between 2025 and 2032, an average of 3.63% of American GDP a year.
He writes that it would be larger relative to the economy than the canal, railway, electrification, highway and telecommunications booms. He also warns that the financing is moving off balance sheets, into joint ventures, private credit and special purpose vehicles. Europe has no figure of that kind. Nokia is headquartered in Espoo and most of its customers are not.
The EU opened bidding in July for seven AI gigafactories worth EUR 30B, of which about EUR 1B of public money is actually committed, while the fastest-growing part of Nokia sells into somebody else’s buildout. Also tagged with
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