This week at NVIDIA’s GTC show in Washington, D.C., NVIDIA and Nokia announced that NVIDIA will invest $1 billion in Nokia to jointly pursue the goal of developing AI-RAN systems in the future. Based on the companies’ formal announcement and a call hosted by Nokia earlier this week, we understand that Nokia will make baseband systems available for field trials in early 2026 and by late 2027, the systems will be commercially available. Today, on NVIDIA’s analyst call, Nokia stated that it expects 5G mass deployment in 2028 and 6G software to be available in 2029. The new Nokia baseband systems will utilize the NVIDIA CUDA system and embed NVIDIA Arc-Pro (also known as NVIDIA Aerial RAN Computer-Pro) in their new systems. Nokia explained that it showcased a prototype of the system at the GTC show in DC, which demonstrated a “call over Layer 3.” Nokia is the most significant telecom equipment vendor to announce timing and availability of a GPU-based hardware RAN. Although it’ll be at least two years before the product is commercially available, we believe that this support could encourage operators to consider AI-RAN more seriously in the coming years.
T-Mobile US plans to trial Nokia-based AI-RAN systems in 2026, and Dell plans to make its PowerEdge servers AI-RAN capable, allowing mobile network operators to engage with Dell for their baseband server needs if desired. Given that T-Mobile US is an early partner with SpaceX’s Starlink service, we believe T-Mobile may be well-positioned in the 6G era, which we estimate will begin at the end of the decade. What we mean is that GPU-based systems can be used for multiple purposes besides RAN baseband, as is contemplated in this NVIDIA/Nokia announcement. It’s likely that when mobile traffic demands are low (such as when customers are sleeping), idle GPU capacity can be utilized for other telecom workloads, like network optimization or for more general tasks, like generating tokens. Given that pursuing non-RAN workloads at scale is relatively power-intensive, we believe it’s likely that T-Mobile will group its baseband servers in urban areas that connect to numerous radio sites. However, in a call hosted today by NVIDIA, its spokesperson reiterated that NVIDIA expects its Rubin-era platforms to be twice as power-efficient as the current Blackwell-based systems. We also believe that in more remote locations, such as rural areas or along highways, these sites may be less necessary, as they could be served by Low Earth Orbit (LEO) satellites.
At the operator level, in the past 5-10 years, there has been a push to disaggregate RAN baseband hardware from software, mostly captured by the concept of Open RAN. Open RAN typically utilizes x86-based processors, often supplemented by accelerator cards to enhance processing speed. If Nokia and NVIDIA’s joint offering is successful, we would expect Open RAN to lose some support.