From a new logo to its first American-born CEO, Nokia has gone all out to move beyond its golden decade and the challenges that followed as a major consumer phone company. But in its new world as a telecom-equipment maker, there is still very much a place for Nokia Bell Labs, which it has owned since 2016 following its acquisition of Alcatel-Lucent.

Nokia isn’t only sitting on this asset; it is also working on incubating startups out of lab research. “If we are able to unleash two or three startups out of Bell Labs in a matter of two years that make a big impact, I would call this program a success,” said Nokia Chief Strategy and Technology Officer Nishant Batra.

Astranu, a startup developing non-invasive imaging technology for ear diagnostics, marks the first spinout launched by Nokia in partnership with Celesta Capital. The VC firm will provide strategic direction, commercialization support, and connections, while Nokia Bell Labs will continue to supply lab resources and R&D expertise to this inaugural venture.

With efforts like spinouts, Batra said, “the whole purpose is to take the technology out of Bell Labs to be able to offer to the world in different fields of uses or different industries—and at times, in both.” But for startups closer to home turf, there are other ways for Nokia to engage.

One of Nokia’s tools is 20-year-old corporate venture firm NGP Capital, formerly known as Nokia Growth Partners. But NGP’s thesis is either market expansion or synergization, not to invest in companies that Nokia will eventually acquire, Batra said. “I’m not saying that cannot happen, but that’s not how we invest.” 

Outright acquisitions are used as a separate tool—to address direct gaps and help pursue Nokia’s broader strategy. Gone are the days when it bought French startup Withings with the aim of reentering the consumer-electronics market through health-tech devices, a move that fell short of expectations. Nokia’s priorities have since shifted in the 2020s. 

Building on its established presence in communications, the company is pursuing growth in two directions: defense and dual-use technology, which drove the acquisition of tactical-communications solutions provider Fenix Group, and AI and data centers, where the $2.3 billion purchase of optical-networking equipment maker Infinera could reinforce its position.

Rapid, an API startup once valued at $1 billion, was another company that Nokia acquired in 2024 with the goal of helping developers more easily connect to telecom networks. “I was very involved in terms of negotiating, because that was in the Valley,” Nokia’s CSTO said.

Batra joined Nokia some four years ago, but his involvement with startups goes beyond his current role. In addition to advising two startups, one in radar tech and one in IoT, he is also chairman of the board of spacetech startup ReOrbit, a Finnish satellite provider. “The passion that this founder has is something else; I enjoy that a lot.”

Startups and corporations aren’t mutually exclusive terms: There are now startups inside Nokia, Batra said. One of these developed the Lunar Surface Communications System (LSCS), collaborating with Axiom Space and NASA to put a 4G LTE network on the moon. The landing didn’t go to plan, but the mission helped Nokia validate key aspects of the network’s operation.

Startup incubation at Nokia is also about to take a more formal turn. In April, Nokia Bell Labs cut the ribbon on its new Bell Labs Venture Studio, which will be operated by the Nokia Ventures team and supported by the New Jersey Economic Development Authority (NJEDA). 

Together with the NJ Nokia Bell Labs Innovation Center, the venture studio will be part of a Strategic Innovation Center focused on helping startups commercialize intellectual property from Nokia Bell Labs and local universities, especially in AI, communications, cloud computing, and optical and wireless networks.

New Jersey is the historic home of Bell Labs and its global headquarters, but Nokia Bell Labs now operates research centers around the world, including key sites in Europe. With Nokia still headquartered in Finland, it is perhaps no surprise that, according to Batra, “there is an intent to build a similar studio in Europe.”

Historically, Europe is also where Nokia has fostered the most entrepreneurs. Due to its outsized importance for Finland, also known as the Nokia effect, its home country was shaken by the massive layoffs it conducted between 2011 and 2013, leading up to the sale of its mobile division to Microsoft. But this decline also sparked a startup boom—with some support from Nokia itself.

The program it implemented at the time to give seed funding to help redundant employees create companies, Nokia Bridge, is estimated to have contributed to the creation of at least 400 businesses. Not all of these were startups, but some were, including mobile OS maker Jolla, and former Nokians still play a key role in Finland’s vibrant tech scene.

Nokia Bridge no longer exists, but the company still wants to support employees as they transition to startups—even when their jobs are not part of the workforce reduction the company is conducting to cut expenses by up to $1.2 billion by the end of 2026.

At the time, Nokia noted the exact scale of the program would depend on the evolution of end market demand. Two years on, the outlook is still unclear after U.S. President Donald Trump sparked turmoil in global markets with his tariff war. 

“We are not immune to the rapidly evolving global trade landscape. However based on early customer feedback, I believe our markets should prove to be relatively resilient,” CEO Justin Hotard declared as the company reported a net loss of approximately $68 million for the first quarter of 2025.

But even after the cuts, Nokia expects to have between 72,000 and 77,000 staffers, and it is willing to lose some to the sirens of entrepreneurship. Two of its top researchers joined Astranu when it spun out, for instance; and with a budget in the order of $10 million a year, its incubation program also encourages internal employees to become entrepreneurs, Batra said.

It is too early to tell into how many startups all of these initiatives could result, and how many could succeed. But if this could become the new meaning of the Nokia effect, this would undoubtedly be a big win for a 160-year-old company that has repeatedly reinvented itself.