Microsoft, Hitachi Form Multibillion-Dollar AI Partnership

June 4, 2024

2 minutes read

Key Takeaways

Microsoft and Japanese conglomerate Hitachi announced a multibillion-dollar, three-year partnership focused on generative artificial intelligence (GenAI) adoption on Tuesday.
Hitachi will integrate Microsoft’s Azure OpenAI Service, Dynamics 365, Copilot for Microsoft 365, and GitHub Copilot into its Lumada Solutions business.
Hitachi plans to invest 300 billion yen ($2.1 billion) in GenAI in fiscal 2024 and will train over 50,000 professionals on AI skills.
The partnership could help Hitachi expand its AI offerings and upskill its workforce, while expanding Microsoft’s AI monetization opportunities by growing its enterprise customer relationships.

Microsoft (MSFT) and Japanese conglomerate Hitachi on Tuesday announced a multibillion-dollar partnership spanning three years focused on accelerating the adoption of generative artificial intelligence (GenAI).

Through the collaboration, Hitachi “will accelerate social innovation with generative AI” by integrating Microsoft’s AI tech into its business offerings, the companies said. Hitachi will embed Microsoft’s cloud services, Azure Open AI Service, Dynamics 365, Copilot for Microsoft 365, and GitHub Copilot into its Lumada Solutions business.

Lumada, which Hitachi says is coined from the words “illuminate” and “data,” is “a generic term for solutions, services, and technology systems that speed up digital transformation (DX) through the use of cutting-edge technologies.”

The Lumada business is expected to contribute 2.65 trillion yen ($18.9 billion) in revenue to the Japanese firm in fiscal 2024, up from Y2.33 trillion in fiscal 2023.

Partnership Aims ‘To Improve the Productivity of 270,000 Hitachi Employees’

“Our expanded partnership with Hitachi will bring together the power of the Microsoft Cloud—including Microsoft Copilot—with Hitachi’s industry expertise to improve the productivity of 270,000 Hitachi employees and help address customers’ biggest challenges, including sustainability,” Microsoft Chief Executive Officer (CEO) Satya Nadella said.

Hitachi CEO Keiji Kojima said that it plans to invest Y300 billion ($2.1 billion) in GenAI in fiscal 2024. The company will also train over 50,000 professionals on AI skills as part of the partnership, incorporating Microsoft’s training, which could help Hitachi bolster its workforce’s AI-related skills amid concerns about an AI talent shortage.

Microsoft has established itself as an early AI leader through its ongoing partnership with ChatGPT maker OpenAI. The technology giant has found some early success in monetizing its AI tech through its enterprise customers, offering AI-powered products and services to corporate clients.