Nokia says the AI data center boom is still running into one very basic problem: companies want to build much faster than the physical supply chain allows.
Chief Executive Justin Hotard says operators could roughly double their construction pace if enough equipment, memory chips and electricity were available. That matters as Nokia leans deeper into AI infrastructure and its cloud business expands.
For all the endless arguments about an AI bubble, Justin’s point is: customers are not slowing because they suddenly lost interest. They are being slowed by what they can actually get their hands on.
Nokia says today’s AI models alone could keep data centers busy for years
Justin told CNBC that the current level of construction does not look excessive from where Nokia sits.
“I don’t think you can say in any manner we’re overbuilding today because reality is that if we could build 2x faster, our customers could build 2x faster, they probably would,” Justin said.
He followed that with another clear assessment.
“So that gives me confidence that we’re still in the early days,” Justin said.
Among the biggest constraints are memory chips and energy. Both have become harder to secure as companies build larger computing clusters packed with increasingly powerful processors.
That leaves Nokia selling some of the less glamorous but absolutely necessary pieces of the system. The company provides networking equipment that connects rows of chips inside the same facility and links separate data centers across different locations.
Basically, AI cannot just have expensive processors sitting around staring at each other. Those machines need extremely fast connections, and Nokia wants to own more of that plumbing.
Investors have rewarded the shift. Nokia shares have gained roughly 130% over the past year as the company becomes more exposed to AI infrastructure spending.
The demand story is unfolding while some leaders inside the AI industry are asking whether development should slow. Anthropic CEO Dario Amodei called for a slowdown in the development of the most advanced systems after warnings from an Anthropic researcher about potential existential risks.
Justin does not think that debate necessarily kills infrastructure demand. He argues that companies still have years of work ahead simply deploying the AI systems already available today. Justin said:
I think the reality is that we’re even where we are today is so early in the deployment, and the power of these models is so massive that there’s a lot of demand to run in just deploying. Even if we didn’t have another frontier model released in the next three years, we could probably make tremendous progress just deploying the technology that’s there today.
Nokia’s growth story is colliding with a fight over land, power and water
The problem is that building all those facilities requires more than servers and network switches.
The Wilderness Society on Monday called for a moratorium on AI data centers built on federal land, citing electricity consumption, water use, wildlife habitat and public access.
That request comes while the Trump administration considers permits for several developments on land controlled by the Bureau of Land Management.
President Donald Trump has pushed for wider commercial development on public lands, including mining and oil and gas projects. His administration has also treated rapid expansion of AI infrastructure and data centers as important to U.S. economic growth and technological competition.
The industry is increasingly running into resistance from communities and environmental groups, however. Huge data centers can consume enormous amounts of electricity and water, meaning the AI boom quickly becomes a utilities and land-use issue once someone actually tries to build the thing.
The Wilderness Society argues that federal land should remain primarily available for recreation, conservation and public access. It wants large AI-linked industrial developments paused before Washington approves more projects.
For Nokia, that adds another layer to an already crowded list of constraints. Chips are limited. Power is tight. Land can become politically difficult. Permits can slow projects down.
None of that changes the demand Justin says Nokia is seeing from customers. It simply means the infrastructure race is moving faster on spreadsheets than it can move in the physical world.