Is Europe Losing Nokia? The Truth Behind the Shift West
There is an unusual tension around Nokia at the moment, a sense that something deep is changing inside one of Europe’s most important technology companies. Entire units are being pushed aside, thousands of employees are being let go (or will be soon), private 5G is being trimmed, and the organisation itself is being reshaped into something far leaner than before. To many observers, it looks like Europe’s last major telecom champion is being broken down or quietly sold off. But the truth is more complex and also more revealing about the state of Europe itself.
The transformation is being led by Justin Hotard, Nokia’s first American chief executive. He appeared on stage in New York and even played the famous Nokia ringtone, a nostalgic reminder of the company’s golden age, but the message he delivered was anything but nostalgic. Mobile networks, once Nokia’s strength, had failed to deliver acceptable returns for years. Big contracts were lost in the United States, the cost base became too heavy, and the global market stopped growing. Hotard said plainly that Nokia could not continue this way. And so the company is collapsing four business groups into two and cutting its headcount toward seventy thousand, down from more than one hundred thousand people just a few years ago.
This is dramatic, but not strange. Well, maybe a little strange as it reminds me of a Burning memo story once again. Corporations in trouble often restructure. What is strange is the direction Nokia is moving as it rebuilds. Nokia is retreating from the industrial computing platforms that once supported its private 5G ambitions. MXIE and other complex systems meant that Nokia had to fight American IT giants on their own territory, and the fight was not worth the effort. Nokia is now placing these industrial units into a group of activities that have no real future inside the company.
At the same time, Nokia is doubling down on the areas where it still leads. It remains one of the strongest radio vendors in the world. It still serves hundreds of private cellular customers. It still owns a treasure chest of telecom patents. But it is increasingly building these strengths into an ecosystem that is no longer European.
This is the part of the story where Europe’s failure becomes visible. Network infrastructure is merging with artificial intelligence, and the companies that shape this new world are in the United States. They build the cloud platforms, the AI processors, the software frameworks, and the data centres. Europe, by contrast, regulates technology very well but produces very little of its own. There is no European NVIDIA. There is no European hyperscaler. Europe has research but not scale, ideas but not platforms.
And so Nokia chose to partner closely with NVIDIA. The American company bought a small stake, gave one billion dollars to support the redesign of Nokia’s baseband architecture, and opened the door to systems that rely on American GPUs rather than Nokia’s own silicon. This move will free Nokia to create software instead of hardware, and it may help the company survive the next technological cycle. But it also places a European telecom champion on top of an American AI stack. The United States benefits from this arrangement too. It secures influence over future network architecture and keeps European vendors tied into American technology.
The United States is not doing anything unusual. It is acting in its own interests, as any nation would. It invests in its champions. It builds its own cloud. It protects its own semiconductor industry. If cooperating with Nokia brings commercial or strategic benefit, it will cooperate. If not, it will simply move on. The United States is not rescuing Nokia. It is using the partnership to strengthen its already dominant position.
The deeper question is why Europe provided no alternative. If Europe had supported the creation of its own AI infrastructure, if it had built strong cloud companies, if it had taken network security seriously, if it had invested in advanced telecom platforms instead of allowing them to fade, Nokia would have had a European path. Instead, the company found itself squeezed between American AI ecosystems and Chinese telecom giants, neither of which Europe can match on investment or vision.
Despite this, Europe still holds one powerful position. Nokia and Ericsson remain global leaders in radio access networks outside China. They still build the antennas and software that make mobile networks work across the world. They still define standards and hold essential patents. This gives Europe a voice, but not the independence it once enjoyed. As the future of telecom moves closer to artificial intelligence and cloud infrastructure, Europe risks becoming a passenger in a domain it once helped build.
This is why the transformation of Nokia feels emotional. It is not just a company adapting to survive. It is a symbol of what Europe could still be, but has not managed to become. Nokia is heading west because Europe is standing still. Not because Nokia wants to abandon its roots, but because the continent that created it has not provided the digital foundations it needs for the next era.
Nokia remains European in history, culture, engineering, and identity. But the future it is being pulled toward is shaped by others. If Europe does not wake up and invest seriously in its own digital sovereignty, Nokia will continue to drift. The company will still carry a Finnish name, but the forces guiding it will come from far across the Atlantic.
The story of Nokia today is not simply a restructuring. It is a quiet warning about Europe’s place in the world. The company is adapting. Europe is not. And unless that changes, the next great chapter of Nokia will be written somewhere else.
