- Pekka Lundmark, who has led Nokia as CEO since 2020, is stepping down
- The company is bringing in Intel's Data Center and AI chief Justin Hotard as Lundmark's replacement
- The move comes after Nokia laid out plans to chase growth in the cloud market in light of a telecom slowdown
After nearly five years at the helm, Nokia CEO Pekka Lundmark announced plans to step down from his position on March 31. Justin Hotard, currently head of Intel's Data Center and AI group, will be filling his shoes.
"It wasn’t an easy decision to step down, but I feel it is the right time for me to move on," Lundmark wrote in a Linkedin post. He added the company initiated the transition process when he expressed a desire to move to a role as a board member. Lundmark will remain with Nokia in an advisory role until the end of 2025.
Lundmark's tenure has been a rocky one, with Nokia fighting to offset a slowdown in telecom spending and notably losing out on a $14 billion open RAN deal with AT&T in 2023. Even so, the news came as something of a surprise, though the choice of a data center executive to lead the telecom company was less so.
Why? Because Nokia very publicly laid out plans to chase growth in the data center market amid a slowdown in growth in its mobile networks business. To that end, it inked a $2.3 billion deal to acquire optical networking vendor Infinera in a transaction that is expected to close in the current quarter.
The transition announcement comes after Nokia noted during its recent Q4 2024 earnings call that its mobile networks business has finally stabilized and highlighted an uptick in private networking deals. Our rundown of its recent report can be found here.
The choice to go with an executive versed in AI and data centers echoes Nokia's recent talk about the growth of those areas on its earnings calls. "The decision to go with Justin Hotard signals Nokia’s board seeing AI and data centers as a key growth area and that the company needed leadership expertise in that area," suggested Daryl Schoolar, analyst at Recon Analytics in an email to Fierce.
"Justin is joining at an opportune time as the company has already absorbed the financial hit of losing AT&T and appears to be generating some positive momentum with some recently announced deals such as with Orange for 5G Cloud RAN," Schoolar noted. "Also, there is a benefit in bringing a fresh pair of eyes to an existing challenge, which Justin is. He might see something different that Pekka didn’t that can help Nokia better grow its mobile business," he said.
The analyst also said that the ex-Intel exec should make it easier for Intel and Nokia to work closer together. This could become important as Intel moves deeper into the AI processor space, as well as its already dominant position in the 5G accelerator space.
This is a developing story. We will be updating with commentary from analysts as it becomes available.