Shares of Nokia Corporation (NOK) were trading lower in premarket action on Thursday. That might seem a bit odd, because the company just announced some pretty good news: it's been picked by Spanish telecom giant Telefónica to be the exclusive provider of networking tech for a bunch of new edge data centers in Spain.

Think of it as Nokia getting the keys to the kingdom for Telefónica's plan to build a smarter, faster digital backbone across the country. This isn't just about connecting more phones; it's about powering the next wave of AI and cloud services in everything from hospitals to schools.

The deal involves rolling out Nokia's networking solutions across 17 "Edge nodes"—specialized data centers that process data closer to where it's created, which is crucial for things like real-time AI analysis. Twelve of these nodes are already up and running, including one at Telefónica's major Tecno-Alcalá site.

For Telefónica, this is a core part of its strategy to beef up its digital infrastructure. The goal is to support innovation and ensure data stays within Spain's borders (that's the "data sovereignty" part) while making services more efficient. By making Nokia the sole networking provider, Telefónica is also simplifying its own operations—one vendor to deal with instead of many.

So, what's Nokia actually providing? Its toolkit includes things like the 7220 Interconnect Router and the 7750 Service Router. In plain English, these are the high-performance, AI-ready workhorses that will help automate processes and seamlessly connect Telefónica's network to multiple cloud platforms. As AI workloads get bigger and more complex globally, having this kind of infrastructure in place is becoming non-negotiable for telecom companies that want to stay competitive.

This Spanish project reinforces Nokia's position as a go-to partner for building secure and reliable data center networks. It's also helping to create what's known as a "nationwide distributed Edge architecture" in Spain—a fancy way of saying a network of powerful, localized data hubs spread across the country.

The Telefónica news comes hot on the heels of another significant announcement from Nokia earlier this week. The company revealed a partnership with Amazon.com, Inc.'s (AMZN) Amazon Web Services (AWS). Together, they're working on an AI-powered solution for "5G-Advanced network slicing." This technology essentially lets telecom providers carve out specific, high-performance slices of their 5G network for premium services—like guaranteeing flawless video quality for a live sports stream or ultra-reliable connectivity for a remote surgery. Bringing AI into the mix aims to make managing these network slices smarter and more automated.

Despite these strategic wins, Nokia's stock was down 1.52% at $7.45 in premarket trading on Thursday, according to market data.