Hitachi signs with Microsoft to apply gen AI to group operations, enterprise customers

Following hard on the heels of a similar-sounding deal with Google Cloud, Hitachi has announced a three-year partnership with Microsoft with a major focus on generative AI (gen AI) for its own staff and services, as well as for enterprise customers, notably in the energy and mobility sectors. Again, its Lumada digital-change unit will be the principal vehicle for the two firms’ joint solutions. 

Hitachi said it will variously embed Microsoft’s Azure Cloud, Azure Open AI service, Dynamics 365 accounting software, Copilot gen AI chatbot for its Microsoft 365 productivity software suite, and GitHub Copilot code completion tool into its Lumada portfolio, as used by 270,000 staff within its own group businesses, and by external enterprise customers in various industry sectors.

Hitachi said the alliance will “propel growth” in annual revenue at its Lumada business to over 2.65 trillion yen ($18.9 billion); it was closer to two trillion yen in 2022/3. The group is to invest 300 billion yen ($2.1 billion) in generative AI in 2024/5, it said. It is already working with Microsoft on various co-creation projects, including on “next-generation” Industry 4.0 solutions, it said.

These include the development of a “field-extended metaverse that runs on Microsoft Teams”. The new work covers “joint projects” to “bolster cloud services, enhance security, and mitigate the environmental footprint of data centres”. In the latter case, it noted the escalating burden placed on data centres by generative AI. As well, Hitachi will train 50,000 staff on AI using Microsoft tools.

Keiji Kojima, president and chief executive at Hitachi, said: “We are excited to further accelerate social innovation by expanding our efforts to social infrastructure areas such as energy and mobility, and by applying generative AI, to improve the productivity of frontline workers, which will become even more important in the future.”

Satya Nadella, chairman and chief executive at Microsoft, said: “We are entering a new era of AI with the promise to deliver transformative business outcomes across every role and industry. Our expanded partnership with Hitachi will… improve the productivity of 270,000 Hitachi employees and help address customers’ biggest challenges, including sustainability.”

Last week, Hitachi and Google Cloud announced a multi-year deal on generative AI for Industry 4.0 which includes the formation of a brand new Hitachi business unit that will use Google Cloud’s large language models and development platform, plus other cloud technologies, to underpin its own products and services, notably those offered by its Lumada digital-change services business.