Nokia has named AI expert Justin Hotard as its next president and CEO, succeeding Pekka Lundmark, who will step down on 1 April this year, and following Nokia’s pivot to AI and data-driven growth.

Hotard, who is currently executive vice president and general manager of the Data Center & AI Group at Intel, brings deep expertise in AI and data centre markets – areas that Nokia sees as crucial for its next phase of expansion.

This leadership transition comes at a time when telecom equipment makers, including Nokia, are grappling with declining 5G sales and seeking fresh avenues for growth.

As industries increasingly invest in AI-powered infrastructure, Nokia is positioning itself to ride the wave.

A calculated transition amid market challenges

Sari Baldauf, chair at Nokia, emphasised the strategic value of the appointment, stating: “[Hotard] has a strong track record of accelerating growth in technology companies along with vast expertise in AI and data centre markets, which are critical areas for Nokia’s future growth.”

Despite the abrupt nature of the announcement, analysts believe the transition has been in the works for some time.

As earlier reported by Reuters, JP Morgan analysts described it as a “surprise” but noted that Lundmark had successfully been “steadying the ship” since taking the helm in 2020.

“Given that a new CEO has already been appointed, it looks like this transition was in the works for some time. With the Datacentre and AI background of the new CEO, it is clear which areas Nokia wants to focus on,” the analysts said.

They pointed out that the selection of Hotard, with his AI and data centre background, clearly indicates where Nokia is headed.

Meanwhile, Inderes analysts echoed this sentiment, seeing the leadership change as a shift in focus towards Nokia’s Network Infrastructure division, where AI-powered investments are creating new growth opportunities.

Also Read: Why Intel CEO Pat Gelsinger was forced out

AI and data centres at the core of Nokia’s strategy

Nokia has been doubling down on AI and data infrastructure, evidenced by its US$2.3 billion acquisition of US optical networking firm Infinera last year. This move aligns with the billions of dollars being poured into data centre expansion to support AI-driven applications.

While Nokia shares rose 1.6% to €4.7 following the announcement, the stock remained far from its historical peak in June 2000, down over 90%. However, in the past year alone, the company’s shares have climbed nearly 28%, reflecting a steady resurgence.

Lundmark, who has steered Nokia through a major repositioning since 2020, will stay on as an adviser to Hotard until the end of the year.

The transition appears to have been carefully orchestrated, with Baldauf noting: “The planning for this leadership transition was initiated when Pekka indicated to the Board that he would like to consider moving on from executive roles when the repositioning of the business was in a more advanced stage, and when the right successor had been identified.”

With Hotard at the helm, Nokia is making it abundantly clear where its priorities lie. The era of 5G dominance is waning, and the company is betting big on AI-driven infrastructure to carve out its next growth chapter.

This shift signals a broader industry transformation where AI expertise is becoming a key leadership credential, and companies that fail to adapt risk being left behind.