In an unexpected development, Nokia revealed a CEO transition plan for March 2025, which analysts interpret as a strategic pivot from networking equipment toward data centers and artificial intelligence.
According to the official press release, Nokia has announced a leadership change, with CEO Pekka Lundmark stepping down on March 31, 2025. Justin Hotard, currently heading artificial intelligence at Intel, has been appointed as his successor and will assume the role of President and CEO on April 1, 2025.
Euro News, Bloomberg, and Reuters reported that after more than four years as CEO, Lundmark, 61, will transition to an advisory role for the incoming CEO, Hotard, 50, until the end of 2025. This leadership transition comes as Nokia seeks to revitalize its business amid slowing orders from phone operators.
At present, Hotard serves as the executive vice president and general manager of Intel's Data Centre and AI Group. He previously held senior roles at Hewlett Packard Enterprise, including senior vice president of Corporate Transformation and president of HPE Japan.
In accepting the position, Hotard expressed his honor at leading Nokia. He emphasized the crucial role of networks in driving society and business, particularly amid ongoing AI transformations. He stated his eagerness to begin and continue Nokia's journey to enhance growth and value.
Sari Baldauf, Chair of Nokia's Board of Directors, expressed delight in welcoming Justin to Nokia, highlighting his proven ability to drive growth in tech companies and his expertise in AI and data centers, which she deemed crucial for Nokia's future. She emphasized his demonstrated strategic insight, vision, leadership, and value-creation mindset as essential qualities for a CEO.
Lundmark described leading the company as a privilege, indicating it was the right time to step down from executive roles after over two decades of leading listed companies. He expressed his intention to explore roles such as a board professional and endorsed Justin as an excellent choice to lead Nokia, looking forward to facilitating a smooth transition.
Intel recruited Hotard from Hewlett Packard Enterprise over a year ago to lead its data center and AI group, aiming to boost its turnaround efforts. In that role, Hotard was responsible for key products like the Xeon server processors, which have recently faced increased competition. A US national, he will now be based at Nokia's headquarters in Espoo.
In September 2024, The Financial Times reported that Nokia's board was evaluating replacements for Lundmark due to stagnant share prices and sales. However, Nokia refuted the claim, stating that it routinely engages in succession planning.
JPMorgan analysts said in a note that they were surprised by the CEO transition at Nokia, noting Lundmark's success in stabilizing the company. They suggested that appointing a new CEO with a background in data centers and AI indicates Nokia's strategic focus.
Similarly, Inderes, which Nokia planned to acquire in 2024 in a US$2.3 billion proposal, believes this move represents a shift towards enhancing Nokia's Network Infrastructure, where data center and AI investments are driving growth.