Nokia is set to receive unconditional approval from the EU for its $2.3 billion (£1.8bn) acquisition of US data centre equipment provider Infinera, Reuters reported.

The deal comes at a time when large tech companies are making huge investments into data centres to build and deploy artificial intelligence (AI) services.

Infinera makes optical semiconductors and networking equipment and has a leading position in intra-data centre communications, referring to high-speed links between servers within a facility.

About 60 percent of the company’s business comes from the US.

Optical networking

Nokia announced the acquisition in June of last year in a move that would make it the world’s second-largest provider of optical networking equipment after China’s Huawei, with a 20 percent share.

The European Commission is scheduled to complete its preliminary review of the Infinera deal by 26 February.

Nokia said in its financial statement on 30 January that it expected to close the deal in the first quarter of this year.

Companies including Amazon, Google, Facebook parent Meta Platforms and Microsoft are planning to invest tens of billions into AI data centres this year amidst an ongoing frenzy of spending on the technology that began in late 2022.

Meta said last month that it would increase its spending on AI infrastructure this year to around $60bn to $65bn in capital expenditures.

The company is building a large 2-gigawatt data centre that “would cover a significant part of Manhattan” to power its AI offerings, said chief executive Mark Zuckerberg on social media.

Data centre investments

Zuckerberg told investors last April that he expected a “multiyear investment cycle” before Meta’s AI spending would result in profits, causing Meta’s shares to plunge 16 percent.

Meta’s announcement came days after US president Donald Trump announced that ChatGPT developer OpenAI, SoftBank, Oracle and Saudi Arabia sovereign wealth fund MGX were forming a venture called Stargate to invest $500bn into AI infrastructure across the US.

The Stargate announcement “created urgency” for other tech companies to send a “message” and show that they are also planning significant AI investments, said DA Davidson analyst Gil Luria.

Microsoft earlier this month it was planning to spend $80bn on data centres in fiscal 2025, while Amazon.com said its 2025 capital spending would be higher than an estimated $75bn last year.