Hitachi, Microsoft Plan for Multibillion-Dollar AI Partnership

By Kimberley Kao

Hitachi and Microsoft announced a multibillion-dollar collaboration to accelerate the adoption of generative artificial intelligence, the latest in a series of partnerships and investments the two companies are undertaking.

As part of the three-year partnership, the Japanese conglomerate will integrate Microsoft products including Microsoft Cloud and GitHub Copilot into Lumada, Hitachi's core digital, software and services business, according to a joint statement by the two companies.

Hitachi aims to hit $18.9 billion in revenue from its Lumada business in the current financial year that began in April. The business generated revenue of $15.0 billion in the last financial year.

Late last month, Hitachi announced a partnership with Google that would see the Japanese company establish a business unit focused on helping businesses solve industry problems with Google's AI technology.

For its part, Microsoft has been pursuing billions of dollars in investments in Asia, especially in Southeast Asia, a fast-growing region of more than 670 million people where demand for data centers and cloud computing businesses is rising.

Last month, the U.S. tech giant announced plans to invest $2.2 billion in cloud and AI infrastructure in Malaysia after disclosing similar plans in Indonesia and Thailand.

"We are entering a new era of AI with the promise to deliver transformative business outcomes across every role and industry," said Microsoft Chief Executive Satya Nadella.

Hitachi also plans to train more than 50,000 generative AI professionals, enabling them to acquire advanced software development skills using GitHub Copilot and Azure OpenAI Service, and use Azure OpenAI Service to enhance its customer service.

Microsoft's cloud computing business, Azure, has been expanding rapidly amid rising demand for AI computing. Last quarter, Azure's cloud business grew 31% compared with the same period a year earlier, with seven percentage points of the growth coming from its AI services, helping to fuel the company's 17% top-line growth.

Hitachi plans to invest 300 billion yen ($1.92 billion) on generative AI in fiscal 2024 to capture new growth opportunities, Hitachi Chief Executive Keiji Kojima said.

The two companies have been working on various projects, including the development of digital solutions for the manufacturing and logistics sectors, Kojima added.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

June 04, 2024 00:37 ET (04:37 GMT)

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