Nokia Plans To Spend $4B On U.S. R&D And Manufacturing
To capitalize on AI demand, Nokia is shelling out $4B on stateside manufacturing and research and development.
Roughly $500M is going toward investing in manufacturing and research in Texas, New Jersey and Pennsylvania. The remaining $3.5B will go toward R&D of new technology to boost its abilities in artificial intelligence and connectivity. The telecommunications giant is also reconfiguring its business lines and establishing a defense segment.
Nokia wants to boost its efforts in AI and cloud computing, build mobile connectivity with AI, and partner with big industry players to make that happen as soon as possible. It is working with Nvidia, using its AI products and networks, which invested $1B in the firm.
Nokia also has its own chipmaker, Infinera, which it acquired for $2.3B in February to bolster U.S. manufacturing and testing capabilities. Nokia invested $456M in two manufacturing facilities in San Jose, California, and Bethlehem, Pennsylvania, as part of the deal.
Billions upon billions of dollars are pouring into U.S. manufacturing and R&D, especially from automakers and Big Pharma. Notably, Hyundai and Eli Lilly announced multibillion-dollar plans to bring their efforts stateside earlier this year.
Policies within the One Big Beautiful Bill Act provide incentives for companies to onshore manufacturing. With 100% bonus depreciation, businesses can write off a big percentage of a facility's cost, including fully writing off equipment costs, during its initial year in operation. Another provision lets companies immediately expense their research and development costs.
Even with the incentives, the U.S. manufacturing industry isn't in the best place. Industrial rent growth is slowing and vacancy is rising.
Tariffs have made building new plants extremely difficult. Trump has slashed tariffs of hundreds of categories, like some food imports, semiconductors, generic pharmaceuticals and computers, but factory building materials are still at elevated tax rates.
As a result, a promised wave of blue collar jobs hasn’t materialized. There were 59,000 fewer people working in the manufacturing, construction, warehousing, transportation, mining and logging sectors this September compared to last September, the first time blue collar jobs were lost since the onset of the pandemic.
The only bright spot was the construction industry, which added 10,000 jobs in that time frame due to the AI data center boom.
